Viewers defecting, writers striking … is streaming’s House of Cards about to fall?

When the political drama landed, it promised a future that Netflix and its competitors couldn’t deliver. Now, TV execs are looking beyond the streaming age.

Field of streams … (Clockwise from top left) Succession; Lord of the Rings: the Rings of Power; Squid Game; Severance; The Bear; Beef. Composite: Andrew Cooper/Netflix; AP; Frank Ockenfels/FX; Amazon Prime Studio; Netflix; HBO

Gwilym Mumford
2023 Jul 01

ust over 10 years ago, a TV series debuted that would help set in train a revolution in the industry. Although, even now, to call House of Cards a “TV” series feels a little off. Yes, the Kevin Spacey-starring political drama did appear on people’s TV screens, and yes it was serialized, but in other ways it was something entirely new. It wouldn’t be scheduled to air in weekly chunks on an existing channel, but instead would be available to be streamed in one go, without commercial breaks and over high-speed internet to the subscribers of the online video platform of a mail-order DVD subscription company called Netflix.

The novelty didn’t just end with that delivery method. Netflix, in bidding for House of Cards, committed to funding two full seasons of the show, an unprecedented move at a time where sitcoms and dramas would routinely be cancelled after a handful of episodes. And there was the $100m price tag, a hefty figure by the standards of established networks, let alone a newcomer dipping its toes into program-making. Netflix had managed to coax Spacey and a Hollywood auteur – in the show’s director and executive producer David Fincher – on to its nascent platform, and it had given them creative freedom to make what they wanted, with none of the meddling notes usually provided by most TV executives.

House of Cards
Full stream ahead … House of Cards, one of the first series to break with appointment viewing. Photograph: Melinda Sue Gordon/AP

House of Cards then wasn’t just a glossy political thriller, but the promise of a glorious new age; one where viewers would have blue-chip content available whenever they wanted it (with no ads!), put together by handsomely remunerated, creatively unconstrained talent. The streaming era had arrived and everyone was invited for $8 a month.

A decade later, much of the gleam of that era has faded. House of Cards turned out be a superficially classy but ultimately quite hollow prestige TV series with a scandal-ridden lead. And streaming, too, has failed to live up to its potential. In 2023 it’s a model that is malfunctioning, without an easy way of fixing it.

Streaming is malfunctioning for viewers. A model that once looked to only have upsides – inexpensiveness, variety, instant accessibility – has become bloated, expensive and confusing. Where once streaming was bunched around a handful of platforms (Netflix, Amazon, BBC iPlayer in the UK, Hulu in the US) now that number has ballooned into the double digits, meaning that viewers have to fork out big sums if they want to try to keep up with the continual churn of buzzy, often over-hyped, shows.

“To make a long story short, people are very dissatisfied by streaming,” says Mattias Frey, head of media, culture and creative industries at City University, London and the author of Netflix Recommends: Algorithms, Film Choice, and the History of Taste. “Audiences like the end of appointment viewing, they like the one-stop shop, but it has produced new complications.”

Lord of the Rings: the Rings of Power, streaming’s riskiest bet so far. Photograph: Amazon Prime Studio

Streaming is malfunctioning for the creatives making the shows, too: it’s why the members of the Writers Guild of America, the union representing Hollywood’s screenwriters, are now on strike over their pay and working conditions, with the Screen Actors Guild mulling a strike of its own. While streaming has handsomely paid some of TV’s biggest-name creators like Ryan Murphy or Shonda Rhimes, writers at the lower end of the food chain subsist on relative crumbs – the “back-end” payments they once received when a show they worked on was rebroadcast (or syndicated) to another network having no direct equivalent in the streaming age – while being expected to churn out more shows than ever in an age of peak TV.

And remarkably, streaming is malfunctioning for many of the companies doing the streaming. Disney’s streaming arm, Disney+ posted an operating loss of more than $1bn in the first quarter of this year (that figure shrank to a still-pretty-eye-watering loss of $659m in the second quarter). Peacock, the streaming arm of US network NBC, is expecting to post losses of $3bn this year as it expands its library. Netflix has turned a profit this year but remains saddled with historic debts of around $14bn. As Brian Steinberg, senior TV editor at Variety puts it: “The companies that built [streaming] have done so without the guarantee that they can make a business out of it.”

Perhaps more alarmingly for these companies is the fact that Wall Street – whose bullishness around streaming allowed the industry to expand at such a rapid clip (with surging share prices allowing more lending) – seems to have cooled its interest in recent times. A Deloitte report on the future of the industry from earlier this year notes that “investors and executives have accepted that streaming is, in fact, not a good business – at least not compared to what came before”.

What came before was a combination of free-to-air and cable – or satellite TV in the UK – that, while by no means perfect, at least had a certain logic to it: what Steinberg calls “a triple revenue stream of advertising, distribution and syndication”, that seemed, by and large, to satisfy the studios producing and selling the shows, the networks broadcasting them and the talent working on them. But then Netflix arrived in 2007 to disrupt everything.

Initially, perhaps doubting Netflix was a threat, the big media companies were willing to license their shows – Friends, Seinfeld, and most significantly for Netflix’s sudden rise, Breaking Bad – out to this plucky new competitor to stream. That willingness soon eroded when they realized just how large that competitor was getting. Cue what Frey describes as the “revenge of the traditional media companies. Netflix had kind of the playing field to itself for a long time. And all of a sudden Disney comes in. And Disney has this huge back catalogue – and it has just bought up 20th Century Fox.”

Quickly the old US media giants pulled their shows and films back from Netflix and into their own rapidly growing platforms: Disney+, Peacock, Warner Bros and Discovery’s HBO Max (now just Max), Viacom’s Paramount+. Netflix, lacking a library to match those giants, started churning out original programming of its own: 158 shows and films in 2018, 371 shows and films in 2019, 467 shows and films in 2020. Meanwhile in 2013, Amazon, flush with cash and noticing the potential of streaming to lure consumers to its main businesses, started dipping its toes into the pool, too (dipping its toes in Amazon’s case meant splurging on the most expensive show of all time in the form of the $715m Lord of the Rings: the Rings of Power) later to be joined by another tech giant, Apple.

The result of this arms race was “peak TV”, a period of seemingly unceasing content: last year saw 599 scripted English-language TV shows being released in the US alone. For many it has been a bewildering era, where it has been impossible to keep up with the amount of programming on offer, creating what cultural critic Anne Helen Petersen described as “a mix of resentment and paralysis” in viewers.

In the peak TV era, ambitious, big-budget series with huge names come and go without many of us even knowing they ever existed: See Clare Danes and Tom Hiddleston in Apple TV+’s The Essex Serpent, or Julia Roberts in Gaslit on Lionsgate+ (bonus points to anyone who even knows there is a streaming service called Lionsgate+).

Just figuring out where and when to watch these many, many series is a challenge in itself. “There’s no central repository to track where your program might be,” says Steinberg. “The consumer has to find it for themselves.” And, unlike appointment viewing, there’s no guarantee that you know anyone who is watching it at the same time or pace, if at all.

This all may be just about tolerable if the vast majority of this programming was good, but much of it isn’t. TV in the 2020s has been overrun by superheroes, sequels and shows that have what a savage New York magazine piece on the state of streaming calls the “expensive signifiers of prestige TV”, without any of the quality to underpin it. Of course there are still exemplary shows – Succession, The Bear, Severance – but the proportion of them seems barely any higher than a decade ago, despite the huge upswing in total shows being made.

This is perhaps best exemplified by Netflix. Once a place where show-makers could expect creative freedom, it has become more ruthless as it has scaled up and begun chasing a truly global audience. Shows that may have been given time to develop in the company’s earlier years are now cancelled after a season or two. While it still delivers some blindingly ambitious series – such as Beef, the comedy-drama about two strangers drawn into a dangerous feud after a road rage incident – there seems to be a greater focus on the sort of flotsam that usually pads out daytime TV schedules: dating shows, true-crime documentaries, gameshows.

“Netflix becoming the new HBO with these amazing new series, that was the initial thing,” says Frey. “But then once you get people hooked, you need to actually serve as a mass market to achieve economies of scale. Now it seems to be a kind of typical factory.”

Shows themselves have even taken aim at this state of affairs: in HBO’s brilliant dark comedy Barry, a character’s TV show is cancelled after 12 hours because “the algorithm felt it wasn’t hitting the right taste clusters”, while the latest series of Netflix’s own Black Mirror takes aim at the preponderance of bad true crime and glossy biopics on the platform.

This recalibration has come at a time when Netflix has had to contend with its first small crisis. Last summer the streamer’s share price plummeted by 35% after 200,000 of its subscribers jumped ship amid the cost of living crisis. Tough decisions have been made, notably a crackdown on password sharing, and the introduction of an advert-supported subscription tier. “For them that is quite radical; they always vowed never to have advertising,” says Steinberg. “They saw a problem last year and are working to correct it. I don’t think they’re out of the woods, but they remain a force in streaming for certain.”

While Netflix has been able to weather its recent storm without cutting down on its enormous programming spend, for others the peak TV party seems to be over. The writers’ strike has shut down production on shows across the US right as streamers are frantically cutting back on their content, even cancelling shows and films in mid- or post-production in order to claim tax write-offs. There is talk of homegrown shows coming off platforms like Disney+ or Max to be licensed elsewhere – an echo of TV’s old syndication strategy. And ad tiers have in recent years been quietly introduced to platforms like Disney+ and Sky’s streaming arm, Now. One by one, those big benefits of streaming over TV for the viewer seem to be being watered down.

“You told consumers: ‘We’d be ad-free and you could watch your show when you liked,’” says Steinberg. “Now it’s: ‘You have to watch ads, and if you don’t watch your show fast enough it will be off the service and sent somewhere else.’ So much of the promise of this new venture is quietly being taken down in some ways – and if you renege on a promise the consumers tend to get mad.”

And, of course, when consumers get mad, they are likely to switch off – especially when they are already feeling a sense of breaking point with the number of platforms they’re being asked to sign up to. “When you look at the stats in terms of the number of subscriptions that people will take, it’s two, maybe three,” says Frey. “And then rather than take on a fourth, they will replace one.” This switching is made simpler by the fact that, unlike the long contracts with the likes of Sky, you can cancel streaming services with relative ease – part of their appeal but potentially a danger to their future.

Jeremy Allen White and Liza Colon-Zayas in The Bear
What’s cooking? … Jeremy Allen White and Liza Colon-Zayas in The Bear. Photograph: Photo: Matt Dinerstein/Matt Dinerstein

There is no shortage of possible replacements, after all. Along with streaming’s big beasts there are smaller, bespoke services such as the horror streamer Shudder to subscribe to, as well as a growing number of ad-supported free streamers like Amazon’s Freevee or PlutoTV.

In the UK the situation is, on the face of it, a little less parlous than across the pond: the license fee, and a lingering attachment to broadcast TV, provides something of a buffer against the streaming revolution (although UK viewers are expected to spend more on streaming than they do on pay TV services such as Sky and Virgin Media by 2025). The BBC foresaw the streaming revolution, launching the iPlayer way back in 2008, and has reaped the rewards, enjoying 7bn streams in 2022 alone. Yet the danger from Netflix, in particular, remains acute: according to a National Audit Office report. last year, 25% of 16- to 34-year-olds watched iPlayer compared with Netflix on 55%.

Unlike in the US, where the old media companies have gone to war with their new tech rivals, British broadcasters have sought to work with them, with co-productions that first appear on the BBC or Channel 4, before moving to streamers such as Netflix and Amazon. Equally clever has been the broadcasters’ money-spinning decision to license their shows to other platforms rather than trying to create unwieldy content libraries of their own like their American counterparts.

At the same time, there has been an inability for British media companies to work together to combat the threat from Netflix: Britbox, initially devised as a platform bringing together the best of British broadcasting, ultimately ended up as little more than a repository for the BBC and ITV’s archive material. And the ad-funded free model adopted by most of the non-license fee-funded British broadcasters is at the risk of the whims of the market: witness the travails of Channel 4, having to cancel shows on the eve of production due to a financial shortfall caused by an ad market slump.

Last November, ITV took the biggest swing by a UK broadcaster for some time when it launched its dedicated streaming platform ITVX, which offers original shows alongside content from its linear channels (ITVX is free and ad-funded, but with a premium ad-free tier). With an £800m price tag on launch, it is a bold play at a time when some are concerned that there are already too many streaming platforms for viewers to keep abreast of.

“People have an affinity for the ITV brand,” says Rufus Radcliffe, ITV’s managing director of of streaming, interactive and data . We’ve been around for 60 years, people understand there is going to be a quality that you get with ITV that you won’t necessarily get with other services.

“I don’t think anyone is denying that it’s a competitive landscape out there. Night after night it’s a competition to win our audiences,” Radcliffe adds.

Financially vulnerable and at risk of losing viewers: just how long can this current roster of streamers last? “If there is a worldwide recession, I think a number of these are looking very vulnerable and will fold,” says Frey.

Steinberg agrees; “I don’t know if everyone who has jumped into the pool will be able to stay in it for ever.”

Old televisions stacked as a pyramid.
How can I decide what to watch on TV and stop scrolling?

There is perhaps a less bruising solution: consolidation, with streamers merging (as was the case with Warner Bros and Discovery forming Max) or even coming together under one platform, as with Spotify in music. That seems unlikely: as Frey points out, rights licensing in film and TV is more complicated than in music, and besides these are big companies – with big egos in the boardrooms.

“There’s still a fight going on,” says Steinberg. “These folks aren’t ready to give up quite yet. So consolidation would surprise me but if the economics become worse, who knows where things are going?”

Just imagine: all these streamers as channels on one platform, some with ads, some without. It sounds great, doesn’t it? And an awful lot like … TV.

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