Streaming TV's real business model

This is a brilliant piece of analysis:

A Golden Lie

the big streaming platforms aren’t asking the questions you’d like them to ask about your browsing. Ideally, you’d expect them to ask how they’re going to help you find great art, or at least great entertainment. You’d expect them to hire experts whose whole job would be making content easier to navigate. Because, after all, they have the stuff you’re looking for, so the product really sells itself, right? They just have to put you in touch with the right series, or the right New Wave French movie.

For a long time, that’s how I actually thought digital television worked. Then I started to notice that the big companies, like Netflix or Amazon, were acting a bit strange. They seemed to be hiding the stuff I wanted to find, on purpose, like a shopping mall or casino. The conversations I was having about television started to disturb me as well; nobody was watching the same show, anymore, but everyone seemed desperate to know what they ought to be bingeing that week. Then it hit me: streaming television isn’t a business model based on rushing out to you, for your viewing pleasure, whatever show happens to be your catnip. That’s an afterthought. The real money’s in constructing a mirage of endless possibility. Netflix’s profits are based on your perception of what you could, potentially, find the time to see. That’s what keeps you consistently subscribed to their service, month after month.

The “mirage of endless possibility” goes beyond the manipulative user interface. Netflix, Amazon, HBO, et. al. have shrewdly co-opted journalists and critics to serve their marketing and retention strategies. A couple of buzzy shows of the sort that appeal to Twitter-obsessed scribblers is all that is required to ensure plenty of free media attention. Customers will keep paying that monthly fee convinced that it unlocks a treasure trove of unique programming. After all, everyone is talking about all the great programming.

In the end, those customers spend most evenings watching re-runs of series from broadcast networks and boring basic cable.

This part of the strategy is not too different from the “salting the mine” swindle.

More than customer inertia drives the business model.

FOMO obviously plays a role:

the fear of missing out — fills us with so much anxiety that it feels like fire ants swarming every neuron in our brain.

So does “intermitten reinforcement” – the phenomenon that makes gambling and video games addicting:

The high is in expecting an outcome, desiring it, imagining it, not in its fulfillment.

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