Streaming services are a growing popularity as media and entertainment companies are trying to respond to fewer people showing up in theaters and more people binging seasons of television from their couch.
Apple just launched their streaming platform, Apple+, and Disney is next in line, launching Disney+ on November 12th. Collecting content from Pixar, Marvel, Star Wars, and National Geographic in addition to its own movies, Disney has amped up its marketing routine to prepare for the streaming wars to come between Netflix, Amazon, and Apple – among others still on the way. In order to get a leg up, each service is offering different (selective) incentives. Disney is attracting customers with a low price of $7 a month. Apple is giving its service for free with the purchase of new or refurbished Apple hardware. Netflix is opting for a different approach, aiming to provide new content on its service every day of the year. Streaming services are surely beginning to dominate the entertainment world.
When we discussed Capture Theory in class, we talked about the example of the railroad freight company. Streaming services, an already billion-dollar business, are poising themselves to be an influential industry. For now, Capture Theory doesn’t seem to apply to this field. Prices aren’t regulated between the streamers unlike some industries. With the massive influx of new companies, perhaps the top earners will group together and attempt to regulate prices. If Apple, Disney, and Netflix get together, they could set a price rate that prevents even more companies entering and diluting the field. Stigler’s perspective might be cynical on the future of streaming companies, and he may believe they’ll capture the government and use it to their own interests.
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