Every path connects to cable.

This is The Stepback, a weekly newsletter diving into a key story from the tech landscape. For insights on streaming platforms, FAST channels, and the evolving entertainment scene, keep an eye on the latest updates. The Stepback lands in subscribers’ inboxes at 8 AM ET.

How it started
Before Netflix fully embraced streaming and moved away from DVDs, the company toyed with the idea of providing subscribers a physical box that could access high-resolution digital movie copies. The plan was to download films to the box overnight, making them available the next day. However, around 2006, Netflix shifted gears after noticing a surge in viewers flocking to grainy viral videos on YouTube. While Netflix had already disrupted the movie rental industry, its pivot to streaming transformed it into a formidable competitor against traditional cable services.

Viewers loved the instant access to vast movie catalogs from their computers without the burden of pricey cable subscriptions. The launch of original series in 2012, coupled with a binge-watching model, generated significant buzz and attracted new subscribers. As Netflix’s user base expanded in those early years, other companies recognized the potential for profit and began launching their own streaming services. Although cable didn’t vanish entirely as streaming gained traction, the number of cable subscribers has steadily declined over the past decade.

How it’s going
Streaming has become the primary method for consuming films and television, with many users subscribing to multiple services to access their desired content. The surge in streaming platforms has resulted in a media explosion, but the maturation of the market has made it increasingly challenging for companies to attract and retain subscribers.

To tackle this issue and manage their finances, platforms have implemented numerous price hikes, making it more costly to keep up with shows compared to the early days of streaming. In an effort to appeal to budget-conscious viewers, many companies have introduced ad-supported tiers to their paid services. Additionally, some have launched free ad-supported television (FAST) services that resemble traditional cable.

Unlike typical streaming services, where constant ads and overwhelming choices can be frustrating, FAST services like Tubi, Roku, and Pluto TV offer a more straightforward experience. Users can enjoy entertainment libraries or focus on channels dedicated to specific series in exchange for watching a few commercials. The way FAST services present their channels in long lists suggests a deliberate design to mimic old cable interfaces. This could indicate that entertainment executives are reconsidering the effectiveness of icon-heavy carousels for showcasing content. It may also reflect viewer fatigue with the algorithms used to recommend shows. As the streaming wars continue, newer companies seem to recognize that the traditional model had its merits.

What happens next
As viewers seek to keep up with new releases from paid streamers without signing up for every service, we can expect to see more bundling in the future. Bundling offers consumers a way to save on entertainment costs, and nearly all major streaming companies have introduced deals that provide access to one or more competitors. Similar to FAST channels, these streaming bundles echo the tiered cable packages offered by telecoms, with some companies, like Verizon and T-Mobile, including access to streaming bundles as perks for their subscribers.

More individual streaming platforms are likely to introduce always-on channels, allowing viewers to watch specific series without selecting individual episodes. For services like HBO Max, this would resemble the way HBO’s various channels air on traditional television. Always-on channels could help alleviate decision fatigue for viewers while also boosting user engagement for streaming services. If every player in the streaming game opts for paywalled always-on channels, bundles, and further price increases, it may feel like we’ve come full circle back to the cable model.

By the way
* More streamers are experimenting with vertical content to cater to mobile users. This trend is partly a response to platforms like TikTok and indicates that Hollywood is serious about exploring microdramas.
* While cable prices have also risen, there’s a notable difference in the speed at which streaming service costs have increased.

Read this
* A retrospective on the history of the Cable Center museum in Denver is worth checking out.
* A detailed analysis of the rising costs of streaming services since 2019 is available.
* Although many have grown tired of binge-watching, there’s an intriguing report on how this model may be regaining popularity.