Netflix, The Office, and the end of watching everything

The "fragmentation" of streaming TV shows is only a problem if you're used to the buffet of cable.

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NBC is pulling The Office from Netflix after all.

Starting in January 2021, the hit sitcom will become exclusive to a new streaming service that NBC plans to launch next year, and it’ll remain there until at least until the start of 2026. The Office is yet another example of major TV networks pulling their shows from streaming services—and Netflix especially—to boost their own over-the-top offerings. Disney and AT&T’s WarnerMedia are making similar moves as they plan to launch new streaming services later this year.

As you might expect, Netflix’s loss of The Office (in 18 months) has prompted more howling about “fragmentation,” and the notion that you’ll soon need a half-dozen or more streaming services to watch everything you want. Cable all over again has become a popular refrain, as some commentators expect all these new streaming services to eventually re-bundle themselves into one package.

theoffice Jared Newman / IDG

You won’t be able to watch The Office on Netflix after January 2021.

I wouldn’t count on a great re-bundling to happen anytime soon, if ever. Instead, we’re witnessing the end of being able to watch everything. While this shift might be jarring for people who still have a big TV bundle, it should be second nature for cord-cutters who’ve gotten used to giving things up. As TV networks desperately pull their shows from Netflix and the like, they might be surprised to find that their viewers won’t come along with them.

Closing the buffet

For decades, cable accustomed people to the idea of being able to watch everything they wanted. There were exceptions—premium channels like HBO and Showtime cost extra, for instance—and the price eventually got out of hand, but you never had to worry about a show becoming unavailable (unless it went off-air and didn’t enter syndication).

The arrival of Netflix only increased the expectation of being able to watch everything, with a big library of older movies and TV shows, plus a respectable selection of originals. Between that and a cable subscription, the viewing options started to feel limitless.

Along the way, though, a couple things happened:

First, people started realizing that they didn’t need the cable part. Netflix, along with other streaming services like Hulu and Amazon Prime, offered more than enough television to watch, to the point that giving up cable channels was worth the cost savings.

Second, the amount of original, scripted TV series has exploded over the past few years, and most of the growth has come from streaming services. Cable is no longer essential to watch the shows that everyone’s talking about, and whether you have cable or not, watching everything of interest—both new and old—has become nearly impossible.

It is into this environment that companies like NBC, Disney, and WarnerMedia are launching their own streaming services. They know that the cable model is unsustainable, and that cable subscriptions are in a downward spiral, so they’re wading into the direct-to-consumer business in hopes of recapturing or maintaining those lost subscribers. (NBC, as if to drive the point home, will provide its streaming service free to pay-TV customers when it launches next year, but will charge cord-cutters $10 per month.)

The problem for those companies is that cord-cutters—or at least those without pay-TV bundles—have already gotten used to not watching everything. While losing a hit show like Friends or The Office to might be frustrating, it doesn’t mean cord-cutters will add more subscriptions just to keep watching. Instead, they’ll make the same cost-benefit analysis that led them to services like Netflix in the first place.

Right now, those calculations aren’t looking good for the likes of NBC and WarnerMedia. NBC’s streaming service will still have advertisements despite costing $10 per month, while WarnerMedia is considering an ad-supported tier to defray the cost of its service, which might otherwise cost at least $16 per month, according to the Wall Street Journal.

We often hear about how popular licensed shows such as The Office have been on Netflix, but my hunch is that these shows are successful because of Netflix, not the other way around. Today, you can still watch reruns of The Office or Friends on cable, but that would require setting a DVR or enduring commercials. The breakthrough with Netflix is that you never even have to think about ads, so there’s no friction between you and a full-season binge.

As Netflix replaces more of those older shows with originals, viewers will simply and easily find something else to watch. That might explain why its subscriber count continues to grow, even though it’s been losing licensed content to other services for years.

Re-licensing, not re-bundling

If you’re used to being able to watch everything, the idea that all these new streaming services will eventually repackage themselves into an all-you-can-eat bundle might sound appealing. I once believed in this theory myself, thinking that companies like Amazon, Apple, and Roku would become the bundlers of the future.

But as the watch-everything era winds down, re-bundling is looking unlikely. The future of streaming will be dominated by a handful of major services such as Netflix and Hulu, and they’ll have little incentive to discount themselves as part of a multi-company bundle. They’re also unlikely to cede control over their users; Netflix would much rather be your first stop for streaming than just another option in some universal TV guide, and it doesn’t even need other companies’ billing systems to enlist new subscribers.

There’s a theory, posed by the investor and former Amazon Studios strategist Matthew Ball among others, that many of the networks pulling their shows from streaming services networks will eventually come crawling back. After failing to gain traction in direct-to-consumer streaming, they’ll realize that licensing to larger services is much more lucrative.

The theory makes a lot of sense in the age of not being able to watch everything. For those networks that can’t keep up with the likes of Netflix, the alternative is not being watched at all.

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