Streaming TV Enshittification Will Continue Until Morale Improves

We've documented in detail how the whole AT&T–>Time Warner–>Warner Brothers
Discovery merger process has been a pointless mess, resulting in no limits of
layoffs and damage to the underlying brands. What was supposed to be a gambit
by these companies to dominate streaming TV, wound up being a very expensive
act of seppuku by over-compensated executives clearly out of their depths.

With streaming subscription growth saturated, the market has been forced to
get "creative" in order to feed Wall Street its expected quarterly returns.
That has meant sagging quality control for streaming services like Max, and a
steady parade of price hikes that generally haven't been worth it.

Speaking on the company's recent conference call, Time Warner Discovery
executives are making it clear that all manner of new restrictions and price
hikes are on the way, just in case you were looking forward to more of that
sort of thing. Among them will be a crackdown on the diabolical "password
sharing" the industry used to view as helpful free advertising:

     During the earnings call for parent company Warner
     Bros. Discovery (WBD) for its fiscal Q3 2024, which
     ended on September 30, WBD signaled that it's gearing
     up to roll out its next strategy for growing streaming
     revenue-- charging subscribers extra for sharing
     passwords-- over the next few months. This will start
     with "very soft messaging" toward Max users before the
     crackdown intensifies in 2025 and 2026, WBD CFO
     Gunnar Wiedenfels said.

     Wiedenfels admitted that on their own, password
     crackdowns are "a form of price increases".

Executives say they’re also exploring, like Amazon, steadily increasing the
number of ads paying customers see. And they will, of course, just be
increasing prices steadily until they see a mass exodus of subscribers:

     WBD also hinted at potential price hikes for Max today.
     During the earnings call, JB Perrette, WBD's CEO and
     president of global streaming and games, noted that although
     Max has raised US subscription prices twice in the past
     two years, WBD believes it can get away with even higher
     prices: "We think the premium nature of our product in
     particular lends us to be-- to have a fair amount of room to
     continue to push price."

Except the "premium nature" of the product doesn't exist anymore. Any cachet
enjoyed from the HBO brand has largely been killed off thanks to executives'
prioritization of lower-quality reality TV dreck as they pursue lowest common
denominator engagement bait at scale. There's still occasionally good art on
Max; but the heyday of HBO as a prestige production empire is long, long
dead.

Meanwhile, the kind of things that customers actually want (lower prices,
better quality, better customer service) cost money and erode those sweet
quarterly returns. The kinds of things customers and labor don't want (price
hikes, sagging quality, layoffs, weird new restrictions on access) are where
the current growth and revenue boosting resides. So guess what you're going to
get.

It's not enough for a publicly traded company to provide an affordable product
that people really like. That doesn't achieve exponential, impossible growth.
To get that (or the illusion of that) requires a certain aggressive creativity
and if streaming can't obtain it via annoying price hikes and restrictions, as
Time Warner Discovery CEO David Zaslav has made clear, they'll achieve it with
pointless new harmful mergers under Trump. These folks insist they're just
engaging in the cold calculus of cost efficiency, but you'll notice that
excessive and unwarranted executive compensation somehow always avoids
scrutiny.

Again, I suspect what's next for the industry is a whole bunch more
consolidation and mergers to try and minimize any serious price competition
and to nab tax breaks. From there I suspect you'll start seeing a greater
fixation on finding creative new ways to "reduce churn", which will likely
include complicated new tricks to make cancelling services more difficult.

When customers inevitably revolt and flock back to piracy (which is already
starting to happen), execs will freak out and blame everyone but themselves
for the trend (VPNs! Generational entitlement! The wokes!), and the innovation
and disruption cycle will repeat itself all over again.


https://www.techdirt.com/2024/11/19/streaming-tv-enshittification-will-continue-until-morale-improves/