The Dark Side of Streaming: How Fragmentation Will Ruin the Golden Age of Television Watching

A few years ago, it looked like we were on the cusp of a golden age of television watching—an age marked not just by quality content, but also by the final break between television shows and the television as a system for delivering that content.

Streaming was going to change everything, it seemed. Any show we wanted to watch, at any time, commercial-free, on a single service. Sure, Netflix didn’t have everything, but in those days it seemed like it was just a matter of time.

Now, it seems like the online TV viewing experience is about to get worse.

Starting this fall, three of Canada’s largest cable companies will be getting deeper into the streaming TV business.

This summer, Rogers and Shaw will open their Shomi service to anyone who wants to pay for it. (Currently, it’s is only available people who subscribe to cable TV or internet packages from Rogers or Shaw.) Meanwhile, Bell’s Crave TV is following almost the exact same playbook, except it won’t available to non-cable subscribers until January.

More competition is usually a good thing. It can force prices down and push companies to be more innovative or provide better service.

But that’s not what’s going to happen here. Instead of convenience, we’re getting fractionalization. Let’s take a look.

Shomi is currently $9 a month, the same price Netflix charges new customers. Crave starts at $4 a month but goes up to $20 with optional bundles. There’s no word yet on what that will look like in January.

Instead of competing on price, the providers are competing on exclusive content. Many, if not most, shows will only be available on one streaming service.

It’s happening already.

Shomi’s marketing promises “exclusive TV shows you won’t find on any other streaming services,” while Bell has made its exclusive rights to old HBO shows a key selling point of Crave.

There’s a side-effect to this: more demand for streaming licenses is pushing the price of those licenses up.

When it was just Netflix, studios and distributors could take it or leave it. Now there’s more competition and Netflix appears to have more money (its’ market capitalization has gone from under $20 billion to over $48 billion in less than two years) so those studios are demanding a lot more money for their licenses.

It means streaming services are going to have to be very choosy with which shows they license.

Netflix saw this coming (or at least reacted quickly) that’s why it’s increasingly producing its own shows.

So now, instead of paying $8.99 to Netflix, you’re going to also have to pay for Shomi, Crave and Amazon Prime just to keep up. Suddenly, the price of cord-cutting starts to look a lot more like a cable bill.

But while Bell and Rogers want to get cord-cutters and cord-nevers signed-up to their new services, they don’t want to encourage more people to cut the cord.

Nowhere is this more true than with sports.

Rogers has a separate streaming service for hockey but in order to watch some games you have to have a subscription not just to cable but also to a specific TV channel. Or take the recent Women’s World Cup. In order to watch games on CTV’s website, you had to have a cable subscription (with any provider).

There’s no doubt that more people will continue to cut the cord but even as the cable companies get into streaming, you can expect them to make it as hard an expensive as possible.