Video streaming promised cheap, tailored viewing, but customers still pay for content they don't watch as more services launch with exclusive content
98.54 USD — Like to binge-watch TV? There's an app for that. And another. And another. And another. Tweets: @pavanrajam and @pavanrajam See also Mediagazer Tweets: Pavan Rajam / @pavanrajam : The other thing this post does is conflate SVOD (Netflix) with “skinny bundle” OTT (YouTube TV, Hulu Live). These businesses can't be grouped together because their viewing paradigms and cost structures are fundamentally different. http://twitter.com/... Pavan Rajam / @pavanrajam : Do we need an explainer on how unbundling raises the cost and decreases value for consumers again? Somehow this article fails to acknowledge that. http://twitter.com/... See also Mediagazer
Context & Ripple Effects
This 2018 Bloomberg piece flagged the paradox at the heart of the streaming pitch: each new exclusive-content service adds another bill, so viewers end up paying for four or five platforms as studios prioritize their own apps — the opposite of the cheap, tailored bundle cord-cutting promised. Pavan Rajam's pushback in the coverage adds a useful distinction: SVOD like Netflix and skinny-bundle OTT like YouTube TV and Hulu Live have fundamentally different viewing paradigms and cost structures, so lumping them together muddies the analysis.
Five years on, the arithmetic has caught up with the critique — an analysis puts a basket of top US services at $87 per month this fall, versus $73 a year ago, now above the average US cable package at $83. That inversion is why the conversation has shifted to re-bundling by smaller services and telcos, which big streamers resist because shared interfaces threaten their direct customer relationships.
First-order effects
- Consumers subscribing across multiple exclusive-content services now pay more in aggregate than the cable bundle they left, while still carrying content they don't watch — the exact inefficiency unbundling was supposed to eliminate.
Second-order effects
- Smaller streamers and telcos move toward aggregation bundles to restore one-bill simplicity, but big services' refusal to share a user interface keeps the fragmented experience intact even where pricing consolidates.
Third-order effects
- If the pattern holds, streaming recreates the cable economics it disrupted — a handful of must-have exclusive platforms priced like a bundle — shifting the industry's competitive question from 'which service' back to 'which package,' with whoever controls the interface capturing the intermediary power.
The trend: Streaming is completing a full circle from unbundling back to re-bundling, as exclusivity-driven fragmentation erases the price advantage that justified cutting the cord.