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Streaming Video Will be Like Cable TV

Streaming video is the wave of the future? Right? That's what Netflix seems to believe, and what a lot of people are really wishing will be true. I'm not quite as optimistic.

(from craig1black on Flickr)

I actually see a future where streaming video is more like premium cable than like a high-tech video rental store.

With cable, if you want to watch an HBO series, you have to pay for HBO. If you want to watch a Showtime series, you have to pay even more for Showtime. On the other hand, the old "video store" concept ensures that, no matter which movie you want to rent, you can go to any rental store and find it there. We have the first sale doctrine to thank for that; and it's the reason why you can find virtually anything on Netflix. Unfortunately, no such thing exists when it comes to streaming video.

Already, streaming video providers are starting to sign contracts with content producers, some of them exclusive deals. Fox recently signed a deal with Amazon. Dreamworks will have an exclusive agreement with Netflix. Microsoft is going to enter the market and offer streaming service through its XBox gaming system. There are even more potential start-ups to come.

The result could be a slew of competitors, all of whom offer different content libraries. So, if you want to watch a Sony movie, you've got to go to one service, if you want to see a movie distributed by Warner Brothers, you've got to look elsewhere. This is very similar to premium cable stations, all of whom have agreements with different studios. A movie playing on Starz won't be available to watch on HBO.

When everyone was upset with Netflix last month, many of them opted to keep the streaming service and drop movies-by-mail (or at least the most vocal among them did). I went ahead and did exactly the opposite. While the streaming service is very convenient, it lacks content. So I concluded access to a much bigger content library is more valuable than access to some content instantly.

Even many of those who stuck with Netflix streaming service gripe about the limited amount of good content. Perhaps they're hoping that over time the Netflix library will go. I'm not sure it's going to grow enough to satisfy a lot of people.

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