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Back to the Future: How Streaming is Becoming the New Cable TV and With It, Adopting Similar Regulations

The media landscape has experienced a significant transformation in recent years, with traditional cable TV services facing growing competition from the burgeoning streaming platforms. Initially, streaming services like Netflix and Hulu were hailed as revolutionary, offering viewers a diverse array of content under a single monthly fee, free from long-term commitments. This marked the era of “cord-cutting,” liberating consumers from the clutches of costly cable packages. However, as the streaming landscape continues to mature, a noticeable trend is emerging – streaming services are beginning to resemble the very cable TV model they set out to disrupt.

In its early days, streaming services presented a clear and straightforward proposition: pay a monthly fee and gain access to a library of content. It was simple and effective. However, as more players entered the market, each with its exclusive content, simplicity started to wane. Services such as Disney+, HBO Max, and Apple TV+ fragmented the market, each demanding separate subscriptions. To access a variety of content, users now find themselves subscribing to multiple services (even if they don’t use them), echoing the cable TV model of bundling different channels. Netflix, once at the forefront of streaming, appears to be altering its strategy in a highly competitive market. The platform, renowned for its original content and pursuit of prestige, is now embracing a programming approach reminiscent of basic cable channels like TNT, as indicated by its recent acquisition of WWE Monday Night Raw rights.

Cable TV thrived on providing exclusive content through specialized channels. Similarly, streaming services are increasingly relying on exclusive, original content to attract and retain subscribers. This shift compels viewers to subscribe to multiple services to access a broad range of content, from Netflix’s “Stranger Things” to Disney+’s “The Mandalorian.” This exclusivity mirrors the cable era, where access to specific channels like HBO or ESPN required subscribing to specific tiers or packages. In response to this evolving landscape, Verizon, AT&T, and T-Mobile are offering bundles, providing a subscription to the ad-supported versions of streaming services at a reduced price, which is very similar to cable bundles.

Initially, one of the key selling points of streaming services was the absence of advertisements. Viewers were willing to pay for content to enjoy an uninterrupted viewing experience. Nevertheless, as the cost of producing original content continues to rise, companies are seeking additional revenue streams, leading to the resurgence of ad-supported tiers. Services such as Hulu and HBO Max now offer lower-priced, ad-supported subscriptions, reminiscent of the ad breaks that were a hallmark of traditional cable TV.

Furthermore, streaming services are also experiencing a gradual increase in subscription prices, a pattern reminiscent of the cable TV industry. Rising production costs for original content and the competition for exclusive streaming rights are contributing to this upward trend in subscription prices. As a result, maintaining multiple subscriptions is becoming increasingly burdensome for the average viewer. In this evolving landscape, streaming services finds themselves in a precarious position, facing higher subscription costs and a programming strategy that increasingly resembles traditional cable TV. The success of this strategy hinges on whether offerings like exclusive sport offers (like WWE for Netflix or MLS for AppleTV+) can attract and retain a broad audience in a market that’s fragmenting into more specialized, cost-effective alternatives.

Notably, Amazon’s Prime Video has also decided to introduce commercials into its films and TV shows for viewers in the UK, Germany, and later the US, unless they opt to pay an additional fee for an ad-free experience. Unlike rivals Netflix and Disney, which introduced cheaper ad-supported tiers, Amazon’s version with ads will not be less expensive. Instead, customers will need to pay more to avoid ads. This strategic shift comes as major streaming companies adapt their strategies to address a post-pandemic slowdown in subscriber growth. By introducing ad-supported tiers, increasing prices, and reducing content spending, these platforms aim to turn their previously loss-making services profitable. Amazon asserts that this strategy will allow it to continue investing in high-quality content over time while promising to deliver fewer ads compared to traditional ad-supported TV channels and other streaming services.

The appeal of streaming services also lay in their user-friendly interfaces and personalized content recommendations. However, with more services entering the market, users are now forced to navigate multiple interfaces to find their desired content, disrupting the seamless experience that was once promised. This fragmentation resembles the experience of flipping through cable channels in search of something to watch.

In summary, while streaming services initially revolutionized television by offering flexibility, lower prices, and an ad-free viewing experience, current market dynamics suggest a gradual shift toward a model that resembles traditional cable TV. The bundling of services, the reliance on exclusive content, the reintroduction of ads, rising prices, and a fragmented user experience all point to this transformation.As consumers navigate this evolving landscape, one question arises: are we witnessing the entertainment industry’s full circle, where the new guard gradually morphs into the very entity it once aimed to replace?

Within the context of EU regulations, intriguing parallels exist in how streaming services and cable TV services are governed. This underscores a commitment to adapting to the digital age. One of the central aspects shared by these two domains is the intricate issue of content licensing and copyrights. Streaming services and cable TV providers, operating within the European Union, are both entangled in the complexities of securing the rights to broadcast content. Whether negotiating to stream a blockbuster movie or accessing live sports events, these services face similar challenges. The regulatory landscape, with entities like the European Audiovisual Media Services Directive (AVMSD), oversees these licensing agreements to ensure fair practices and compliance with copyright laws.

Moreover, consumer protection and privacy are core principles of EU regulations, equally applicable to cable TV and streaming services. These regulations encompass aspects such as transparent advertising, data protection, and accessibility for individuals with disabilities. Providing consumers with transparent information regarding subscription costs, content availability, and data handling practices is essential for building and maintaining trust.

Another noteworthy parallel lies in the realm of content ratings and age restrictions. EU governments mandate that content be classified and carry age restrictions for television programs and movies. These requirements apply universally, affecting both cable TV channels and streaming platforms. Regulatory bodies diligently enforce adherence to these standards, enabling parents to make informed decisions about their children’s viewing preferences while ensuring a consistent level of content appropriateness across different platforms.

Additionally, the EU’s commitment to fostering competition and preventing anti-competitive practices extends its protective measures over traditional cable TV companies and emerging streaming giants. Regulatory authorities, guided by principles of fairness, scrutinize mergers and acquisitions to ensure that market dominance does not hinder healthy competition. This vigilant oversight underscores the EU’s dedication to maintaining a level playing field within the ever-evolving media industry.

Inclusivity and accessibility represent additional pillars of EU regulations that resonate deeply in both cable TV and streaming services. Ensuring content accessibility for individuals with disabilities is a shared objective. EU rules mandate features like closed captioning and audio descriptions, promoting a more inclusive media landscape where content is accessible to all.

Lastly, EU regulatory frameworks place significant emphasis on the promotion of local content production and the safeguarding of national interests. Governments may employ incentives such as subsidies and quotas to support local content creation, contributing to the preservation of national cultures and industries. This policy approach applies impartially to cable TV channels and streaming services.

In conclusion, the regulatory landscape governing streaming services and cable TV services within the EU reveals remarkable similarities. Both domains are subject to stringent oversight, designed to ensure fair competition, protect consumers, and maintain content quality. Recognizing these shared regulatory principles is crucial for policymakers and industry stakeholders alike. In a world where consumers are presented with an abundance of choices, EU regulatory frameworks must continually adapt, striking a balance between fostering innovation and safeguarding the rights of viewers and content providers. The journey of navigating the changing tides of EU regulation for streaming and cable TV is an ongoing process, reflecting the dynamic nature of the media landscape.

János Tamás Papp, PhD is an assistant professor at Pázmány Péter Catholic University, Hungary and a research expert at the National Media and Infocommunications Authority of Hungary. He earned his JD and PhD in Law at the Faculty of Law and Political Sciences of the Pázmány Péter Catholic University where he has taught civil and constitutional law since 2015 and became a founding member of the Media Law Research Group of the Department of Private Law. His main research fields are freedom of speech, media law, and issues related to freedom of expression on online platforms. He has a number of publications regarding social media and the law, including a book titled „Regulation of Social Media Platforms in Protection of Democratic Discourses”.

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