• Lowpass
  • Posts
  • No, streaming hasn’t become cable

No, streaming hasn’t become cable

Like comparing apples to a $125 fruit salad

In light of this week’s news that Comcast is now offering a bundle of Netflix, Peacock and Apple TV+ for $15 a month, there’s been a new wave of articles and social media posts claiming that streaming has become cable.

It’s a notion that’s being repeated by everyone, including Techcrunch, The Verge, Bloomberg, the Washington Post, NPR and many, many others. It’s also just plain wrong – but its prevalence may be a warning sign for the streaming industry.

This article was first published as part of Lowpass, a weekly newsletter about AR, VR, streaming and more. Sign up now for free:

Bundles are back! Well, not really. It’s tempting to argue that streaming bundles are the same as cable bundles, especially when it’s a cable company that’s doing the bundling. However, likening Comcast’s new streaming bundle to the cable bundle just doesn’t make sense.

  • What drove consumers nuts about the cable bundle wasn’t that it offered them a bunch of channels for one single price, but that it included tons of channels that they didn’t even watch. Your typical cable bundle had anywhere from 100 to 200 channels, including local broadcast programming, basic cable channels ranging from news networks like CNN to home shopping, C-SPAN, a bunch of channels targeting specific immigrant communities, and more.

  • This type of bundle-stuffing wasn’t actually something that cable companies liked, either. Most of them would have preferred to offer smaller bundles, or even sell channels a la carte, but programmers didn’t play ball. 

  • Case in point: Viacom alone was at one point packaging more than two dozen channels in its wholesale bundle. If a cable company wanted to carry popular channels like Nickelodeon or Comedy Central, it also needed to include VH-1 Classic, TV Land and Spike. You know, the stuff no one watched.

  • Comcast’s new streaming bundle on the other hand includes just three streaming services, for which the company charges $15 per month. For comparison’s sake: The mid-tier, 125-channel “popular TV” bundle of Comcast’s Xfinity TV service currently costs $122 a month in my area.

About those costs. The other thing people hated about cable were all of those hidden costs, which regularly more than doubled your actual bill.

  • The aforementioned “popular TV” bundle is advertised as costing just $50 per month. However, that doesn’t include a $26.70 monthly broadcast TV fee, a $18.75 regional sports fee (whether you watch sports or not), $16.56 in taxes and a $10 rental fee for a Xfinity set-top box.

  • Oh, and you didn’t say you wanted to watch Cartoon Network. That’s not included in this bundle. Better sign up for Comcast’s “ultimate TV” bundle, which costs $143 a month.

  • Want to watch cable on more than one TV in your home? Better rent another box.

  • Prefer to pay with credit card? That’s another $5 a month.

  • The beauty of streaming is that there are no such hidden fees. Netflix doesn’t charge you a local broadcast fee, and getting Apple TV with its MLS games doesn’t require you to cough up a regional sports fee.

How did cable ever get away with this? The main reason streaming, even bundled, isn’t at all like cable is that cable was often the only game in town. With little to no competition, cable companies could force people into two-year contracts (luckily, those are gone in most markets) and add a whole bunch of junk fees to your bill.

  • Sure, there was satellite TV, and sometimes TV services run by local telcos, but not everyone had access to these alternatives.

  • Plus, there was no way of getting access to individual channels without getting the bundle, whether from your local cable company, or a perhaps slightly cheaper Dish or Directv.

  • Even getting HBO, which was considered an a la carte add-on and not part of any programmer bundles, was long impossible without signing up for at least some sort of basic cable or satellite TV package.

  • That’s the biggest difference to today’s streaming bundles. Yes, you can get Netflix as part of Comcast’s streaming bundle, but you can just as easily buy it on its own. The same is true for Peacock, Apple TV+ and virtually any other streaming service offered as part of these kinds of discounted bundles.

  • Streaming services hope that you’ll sign up for the bundle anyway, just because it’s cheaper and easier (and lowers churn for them). But there’s no obligation whatsoever to do so.

Yes, but. Comparing streaming bundles to cable bundles is like comparing apples to … a $125 fruit salad, I guess? Still, the mere fact that these comparisons are so frequent should give streaming insiders some pause. That’s because they do reflect a real fear over moving back to a world of less choice and high prices. And while this really isn’t about modern-day bundles per se, individual services do risk falling into the “this feels like cable” trap.

That’s especially true as the industry faces further possible consolidation. Sure, there may be room for two or three Netflix-sized services, priced up to $20 per month and including everything under the sun from live sports to reality TV to movies and scripted shows. But there’s also a risk that consumers look at services like Max and think: Why do I need to spend $20 per month for this if all I want is to watch HBO in 4K?

This article was first published as part of Lowpass, a weekly newsletter about AR, VR, streaming and more. Sign up now for free.

Photo by Kelly Sikkema on Unsplash

Join the conversation

or to participate.