Will Content Fragmentation Drive a New Rise of Piracy?

The digital content marketplace largely has peer-to-peer content piracy to thank for the behaviours and dynamics characterising it today. Piracy itself was the forefront of the new era, quickly being overtaken by legitimate streaming services, which also challenged – and continue to challenge – long-held traditional methods approaching irrelevancy given new technological capabilities available on the market. 

Now, however, we have reached a new tipping point: peak attention. With only so many hours in a day, and a jostling excess of options readily available to all consumers whenever they please, the balance of power is shifting from proposition to peruser. In a market of plenty, there is always a better option. 

What does this mean for Netflix? On the one hand, video remains king in the attention economy with most consumers’ attention now spent watching video content. On the other, Netflix has suffered a recent blow; its Q2 earnings call reported a mere 2.7 million new memberships as opposed to the target of five million, and a loss of 0.1 million subscribers in its domestic market, the US. In the peak attention economy, streaming services now are no longer fighting to grow their subscribers – they are fighting simply to retain them. 

Into this already saturated marketplace are due to come several video content heavyweights, including the as-yet-unnamed Warner Media proposition, Disney+, and Apple TV+. While many of these services are positioning themselves as additive rather than substitutive, the fight for consumer time and money will undoubtedly be – and indeed already is – intense. 

All of this competition, however, overlooks the pragmatic reality this leaves for consumers who must navigate the resulting fragmented content landscape. With each proposition having a specific niche it hopes to utilise to draw consumers, none of them can any longer manage to provide for all of their needs. 

A standalone Amazon Prime Video subscription costs $12.99 per month. A basic Netflix subscription costs $8.99. Hulu’s ad-free proposition is $11.99. Disney+ will be $6.99, HBO Now is $14.99, and Apple TV+ will likely be – as with all Apple products – on the high end while still remaining competitive. 

Will consumers really want to choose one segment of content, after years of single-service access to any? The hope, of course, from the service’s perspective is that they will continue to stack subscriptions. However, with service stacking rates relatively unaffected despite the growing multiplicity available, this seems unlikely.

Indeed, given the cost-effective, on-demand pull of streaming services in the first place, to be suddenly faced with a marketplace in which they need a WarnerMedia subscription to watch Friends, a Netflix subscription to watch anything new and interesting, an HBO Now subscription to keep up with Game of Thrones, and a Disney+ subscription if they watch sports, have kids or like Marvel movies, consumers are now looking at a $50 monthly spend at minimum to get the bare minimum of the content they want. And that just covers video amidst a plethora of competing content types and expenditures. Consumers will effectively be faced with the cost of a skinny bundle cable package, but with a multiplicity of differing user experiences and billing relationships to manage.

Streaming grew out of peer-to-peer for its convenience; however, the means are still available that anyone with an internet connection and a motive can simply shift back to peer-to-peer the second the convenience aspect disappears.

The lack of service loyalty is already indicated by the readiness of consumers to switch services. This trend is still niche, but it could well grow – and it is only one possibility of how consumers will react to an over-fragmented rights distribution in an over-saturated content landscape. The biggest bidders with the most well-rounded propositions (i.e. best value overall) will likely do all right – but competition will be fierce, and consumers themselves will be competing.