The recent launch of Disney+ has ushered in a new phrase: streaming wars. Media companies are scrambling to deliver high-quality content to consumers at affordable prices.
First, it was HBO and Amazon Prime that challenged Netflix. Not to be outdone, Disney threw its hat in the ring with its new streaming service, which also features original content. But we may just be getting started. Apple is preparing to unleash its own streaming service. Meanwhile, AT&T’s WarnerMedia has its own super package in beta: HBO Max, which reportedly will feature a Friends reunion.
Media companies are spending an insane amount of money on a flood of new content, from shows like Disney’s The Mandalorian and HBO’s Watchmen to documentaries like Netflix’s ReMastered: The Two Killings of Sam Cooke and Apple’s forthcoming look at pop star Billie Eilish, who is reportedly being paid $25 million for the project. (Nice work, Billie.)
All of this is great for consumers—I say this as someone who’s halfway through The Mandalorian and loving it—but it’s easy to overlook why it’s happening.
Here are 17 statistics that will help you understand the scope of streaming and what’s going on.
- In 2018, Americans streamed eight billion hours of content per month. That’s equivalent to nearly a million years (912,635 to be precise).
- Ten million people signed up for Disney+—the day it launched.
- Netflix is spending a reported $15 billion on original content in 2019 alone.
- In 2000, 68.5 million Americans had cable subscriptions.
- In 2011, 21.5 million Americans had Netflix subscriptions.
- By 2017, 48.6 million Americans had cable subscriptions, and 50 million Americans had Netflix.
- Surveys show that 148 million Americans say they watch Netflix “at least once per month.” That’s followed by Amazon Prime (88.7 million).
- Apple, which doesn’t even have a streaming service yet, reportedly has already spent $6 billion on original content.
- WarnerMedia recently agreed to pay $425 million to reclaim streaming rights for Friends for the next five years, according to reports.
- Disney+ and Netflix offer streaming services for roughly 50 cents per day ($16 per month).
- HBO Max will charge even less for its streaming service—$15 per month—reports say.
- When HBO was launched in the 1970s, its service typically cost $6 a month ($37 in 2018 dollars).
- In 1995, cable cost $22 a month ($38 in 2018 dollars), on average. By 2015, cable providers were charging $69.03, on average.
- Surveys show that nearly 60 percent of Americans are cord-cutters (people who once had cable but chose to cancel).
- The average American takes seven and a half minutes to choose what to watch when streaming.
- In the year 2000, Blockbuster collected $800 million in late fees, and its stock price was $80 a share.
- By 2006, Blockbuster’s share price was around $3. In 2010, the same year Netflix made $161 million in net income, Blockbuster declared bankruptcy.
Why is all this happening? Two words: incentive and innovation.
FEE’s Sean Malone recently offered a brief history of streaming that shows how this evolution took place. The transformation was a classic case of Schumpeterian creative destruction, the process by which a long-standing industry is dismantled and replaced through innovation. The explosion of original content and efficiency was sparked by entrepreneurship.
Reed Hastings founded Netflix in 1997 after getting stuck with $40 in late fees after renting Apollo 13. Hastings, who is today worth $3.7 billion, decided he could deliver something better to consumers, first through mail-order movies and later streaming. And he did. (Though at one point Hastings offered to sell Netflix to Blockbuster for $50 million. Blockbuster said no. Ouch.)
As a result, today our biggest headaches are deciding what awesome content to watch and which great services to subscribe to (and how many). These are wonderful problems to have, and it’s all the result of price incentives that have major media companies fighting to deliver us the best content at the lowest price.
And remember, if you’re dying to watch The Mandalorian but can’t let go of HBO because you’re only on season 3 of Games of Thrones, you can always go to a friend’s house to see Baby Yoda.