Remember when streaming was the future? A decade ago, Netflix offered a vast catalog for a mere $8 a month, promising an escape from the shackles of cable TV and its relentless ads. Today, that promise feels like a distant memory. As we find ourselves saturated with streaming content, there’s a growing realization: modern streaming has become a scam, and piracy is making a monumental comeback. This isn’t just about escalating prices and forced ads; it’s a symptom of a deeper problem—the financialization of our media landscape by private equity firms, impacting everything from Hollywood to the wider internet.
From Affordable Freedom to Pricey Purgatory: The Streaming Illusion
The shift has been stark. What was once cheap and ad-free is now insanely expensive and often riddled with advertisements.
• Skyrocketing Costs: Mainstream platforms like Netflix, Amazon Prime, Hulu, HBO Max, Disney Plus, Paramount Plus, Apple TV, and Peacock now collectively demand over $100 a month, or $1,236 a year, just for the “same level of ad-free access” you might have had for $8 a decade ago. Niche services like Curiosity Stream and Crunchyroll pile on even more costs.
• The Return of Ads: Many services, like Amazon Prime Video, are now forcing ads into existing subscriptions or charging an additional fee (e.g., $3/month) to remove them. This directly undermines the initial appeal of streaming, leading to significant customer dissatisfaction and an estimated 25% of Prime Video’s young adult users canceling their subscriptions when ads were introduced.
• “Shrinkflation” Model: Consumers are experiencing a “shrinkflation” effect—getting less for even higher prices, much like a chocolate bar that shrinks in size but not in price. This approach completely ruins customer satisfaction, a short-sighted decision driven by private equity’s push to “squeeze every last drop out of their subscriber base”.
Hollywood’s Financialization: How Private Equity Took Control
The roots of this problem lie in the profound transformation of Hollywood over the past few decades, a process described as “financialization”. Studios no longer even own themselves; they’ve often sold out to private equity.
• Leveraged Buyouts and “Distressed Assets”: Private equity firms identify “distressed assets” like struggling movie studios and acquire them through leveraged buyouts, using billions in borrowed money. They pay off existing debts with even more borrowed cash, often joined by larger competitors to extract further profit.
• The MGM Example: A prime example is MGM, which, despite its rich catalog including James Bond and Spider-Man, was acquired in 2004 by private equity firms and Sony. This deal left MGM saddled with an additional $3.7 billion in debt. The private equity strategy involved stripping valuable assets—Sony took the profitable characters and content—leaving MGM to effectively cease to exist as it was traded between firms.
• Industry Concentration: This “gold rush” for private equity led to a highly concentrated industry. Over two decades, firms like JP Morgan bought AMC, Madison Dibbornne Partners acquired Cinear, Blackstone took over Nielsen Company (a major Hollywood audience data firm), and private equity firms like Silverlake acquired Hulu, Univision, Dreamworks, Miramax, and major talent agencies like WME and IMG.
The True Cost: Diminished Content Quality and Creative Stifling
The pervasive influence of private equity has had a devastating impact on the quality and creation of content itself.
• Cost-Cutting and Layoffs: Private equity firms prioritize profit extraction by cutting costs, leading to mass layoffs and reduced wages for media staff. Media writer and producer pay fell by 23%, with actor and screenwriter pay dropping by similar levels.
• “Skeleton Crew Studios” and Declining Quality: These “skeleton crew studios” are unable to produce quality content at the speed or standard they once did. This explains why we no longer see shows like “Breaking Bad,” which produced a new season almost yearly between 2008-2013. Instead, we see “flop after flop” in modern movies and TV.
• Reality TV and IP Wars: Studios, under the direction of their private equity “puppet masters,” now churn out more reality TV because it’s significantly cheaper to produce, filling streaming libraries with low-cost content. The industry’s primary mode of competition has devolved into “IP wars”—hoarding and leveraging intellectual property to keep subscribers on a specific platform, rather than fostering long-term thinking or passion in projects.
Controlling the Narrative: Private Equity’s Grip on Media Reporting
The reach of private equity extends even to the news outlets that cover Hollywood. Major entertainment news companies, including The Hollywood Reporter, Variety, Rolling Stone, and IndieWire, are all owned by Penske Media Group, a conglomerate heavily funded by private equity firms. This financial backing ensures that information about private equity’s widespread acquisitions often gets “buried in the press”.
Beyond Streaming: A Degraded Digital Experience and Other Industries
The “greedy decisions” that are undermining streaming are also “undermining the entire internet as a whole and possibly the rest of the economy”.
• The Degraded Internet: Social media companies, pushed by investors, sanitize online discussions for advertisers, leading to a degradation of actual content quality. Websites are now often frustrating to navigate, riddled with legally mandated cookie messages (with hidden “reject all” buttons) and anti-ad blocker notices. Many articles are “rushed out insane drivel” written by bots due to layoffs, making it increasingly difficult to find genuine human information and contributing to the “dead internet theory”.
• Music Industry Exploitation: Spotify, adopting an “expand and squeeze” model, has consistently lowered royalties for small artists, now requiring 1,000 streams per year per track to earn any money. They’ve also imposed more restrictions on free users.
• Subscription Culture in Cars: The trend is even seeping into other industries, with private equity pushing car manufacturers towards subscription costs for features already built into the car, such as BMW’s proposal for a £10/month subscription for heated seats.
The Inevitable Consequence: Piracy’s Resurgence
Ultimately, these greedy, short-sighted decisions, driven by private equity’s relentless pursuit of short-term profits over long-term value and customer satisfaction, are backfiring. Unlike chocolate bars, where consumers have limited choice, in digital content, there is always an alternative.
The resurgence of piracy is an “inevitable economic consequence” of offering a bad service. As streaming services become more expensive, laden with ads, and offer a diminished experience, more and more people are simply opting out and turning to free alternatives. This “corporate ecosystem could collapse under its own weight as too many short-term decisions end up being catastrophic”. Perhaps, for once, this greed could actually be punished in the one sector where consumers truly have a “pressure release valve”.
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