![image.png](https://files.steempeak.com/file/steempeak/culgin/j8yMwN91-image.png)

About a month ago, my dear friend @mrshev published [this piece on the ongoing video streaming war](https://steempeak.com/appletv/@mrshev/appletv-plus-vs-netflix-the-streaming-war-begins-3eldcmzo). Video streaming is popularized by Netflix. They started out as a video rental company but their great foresight led to them dominating the video streaming service. As of today, they are still the [most popular subscription based video streaming service](https://www.statista.com/statistics/910895/us-most-popular-video-streaming-services-by-reach/), but the question remains, for how long?

<center>![image.png](https://files.steempeak.com/file/steempeak/culgin/AYvcO9aM-image.png)</center>

Looking at this already saturated [list of streaming services](https://www.consumerreports.org/streaming-media-devices/guide-to-subscription-streaming-video-services/), and with [Apple](https://www.theverge.com/2019/3/25/18280920/apple-tv-streaming-service-announcement-price-date-launch-event-2019) and [Disney](https://www.digitaltrends.com/movies/disney-plus-streaming-service-news/) both recently announcing their own version of video streaming service, how long can Netflix stand up to the challenges? I am, however, not trying to answer this question today. Instead, I want to share my own **hypothesis as to why this competition is not sustainable and how it is going to hurt consumers and the service providers in the next few years**.

![image.png](https://files.steempeak.com/file/steempeak/culgin/xbsK6dXX-image.png)

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## More competition is good for consumers? Not quite...

Under a free market, where all suppliers are providing similar goods and services to consumers, more competition is good. With competition, consumers will be able to get better quality service at a better price. However, is video streaming service really an open and free market? Not so.

Video streaming companies have exclusive streaming rights on their original content. I can only watch "Black Mirror" on Netflix, "Game of Thrones" on HBO and "Dimension 404" on Hulu. Now with Disney also coming into play, all future Disney, Marvel and Lucasfilm content will likely to be only exclusive to Disney+.

![image.png](https://files.steempeak.com/file/steempeak/culgin/w2m8TMXz-image.png)

On the surface, having more choices seems to be good for consumers. However, if you think a bit deeper, **these companies are all individual monopolies of their own original content**. There is no service which I can subscribe to watch all the videos that I want. Given my limited budget to spare per month, I am forced to give up some of them and that is because it is not an open and free market! 

What I foresee might happen is that more original contents (as they compete for market share) will be created by each company, leading to higher operating costs which in turn leads to higher subscription fees. Since they are inelastic goods, even if I am charged a higher subscription fee, I have to continue with my subscription if I do not want to miss out on my favorite programs. In fact, many will probably sign up for multiple subscriptions, leading to higher monthly expense. Though, there will be more (and likely higher quality) content available, I feel that consumers, ending up having to pay more, are worse off than before. We only have a limited amount of time to spend watching TV, so even with better quality programs, I think the increased utility is marginal as compared to the higher cost.

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## In that case, isn't monopoly good for the companies? Again, not quite...

If you have a monopoly on a physical product or a face-to-face service, then it is likely to be good. However, in this digital age and given that we are talking about digital content, **piracy** is always a worry. Consumers do not have unlimited resource and we cannot possibly subscribe to every service available to watch just one or two shows from each company. What is the best way to cherry-pick what I want then? Through illegal downloads.

Online piracy is difficult to prevent and it will get even more so as technology progresses. When the overall cost of consumption increases, and companies busy chasing a shrinking market segment with the ability to pay, those who cannot afford will resort to piracy. This happened to the music industry when P2P sharing (e.g. Napster) became popular with the rise of Internet. For consumers who were not willing or simply cannot afford to pay $15 per album, piracy became a natural solution.

<center>![image.png](https://files.steempeak.com/file/steempeak/culgin/OF6cJveC-image.png)</center>

I am seeing a similar situation starting to form here. Consumers will eventually be forced to fork out $15 per service per month to just watch a few programs per service. At the end of the day, they might just resort to piracy when the costs exceed their budget. When that happens, the companies lose revenue and with the increased cost (due to increased content production), their revenue is set to suffer.

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## What will happen then? My hypothesis...

History does not repeat itself, but it often rhymes. I think something similar is going to happen to the video streaming industry. **First there is going to be some sort of unbundling**. This was popularized by Apple iTunes. Knowing that people are unwilling to fork out $15 to buy an album just to listen to a few songs, Apple was smart to start selling individual songs on iTunes. This allowed people to get 10 songs, as compared to 2-3 songs, that they like with the same $15 budget, which is a huge win for consumers.

Hence, I think that these video streaming services will eventually allow consumers to pick and choose the programs that they like and just subscribe to those. For example, I can just choose to watch all seasons of "Game of Thrones" for a period of time just by paying a one time payment of $15. This will be great for some consumers who just want to watch a particular program, which is an untapped market as I see.

**Next, there is a possibility of service aggregation**. Much like how Spotify had aggregated the music industry, I think one of these existing companies will be big enough to negotiate a deal to aggregate all the programs available on respective platforms. My guess is probably Amazon or Disney. Such deal will allow the aggregator to stream all programs, with the streaming revenue paid back to the company which owns the right to the content.

<center>![image.png](https://files.steempeak.com/file/steempeak/culgin/YIqXdgbC-image.png)</center>

**Finally, I think that all video streaming companies will become aggregators and cross carry each other's programs**. This will eventually shift the market to become more like a free market. The companies will then not compete based on the content they produce, instead they will compete on streaming quality and user experience.

I also have a moonshot guess that **blockchain technology will be used to ensure a fair distribution of streaming revenue once every company is an aggregator**. This is because there will certainly going to be trust issues when each company allow one another to stream their original content. How are they going to report streaming statistics and apportion revenue correctly. I thought using an open blockchain platform with smart contracts can do the job.

What do you think? Do you have a different hypothesis on how the war will evolve? And do you think having more of such streaming services is a good thing? Thanks for reading!

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This post is created on the Steem blockchain. Check this series of posts to learn more about it and start writing on an immutable and censorship-resistant content platform:
- [What is Steem? - My Interpretation](https://steempeak.com/steem/@culgin/what-is-steem-my-interpretation)
- [Steem Thoughts - Traditional Apps vs Steem Apps](https://steempeak.com/steem/@culgin/steem-thoughts---traditional-apps-vs-steem-apps)
- [Steem Thoughts - A Fat or Thin Protocol?](https://steempeak.com/@culgin/steem-thoughts---is-steem-a-fat-protocol-or-a-thin-protocol)
- [Steem Thoughts - There is Inequitable Value Between Users and Apps](https://steempeak.com/@culgin/steem-thoughts---inequitable-value-between-users-and-apps)