In this week’s Five On Friday, we delve into a series of thought-provoking articles that shed light on the shifting landscapes of digital platforms, streaming services, healthcare, and regulatory frameworks. From the intriguing concept of ‘platform decay’ affecting major online platforms to the escalating ‘serial churn’ rates in streaming subscriptions, we explore the dynamics reshaping user experiences and industry practices. We also examine the expansion of subscription-based healthcare services, the emerging ad-supported streaming wars poised to redefine advertising and viewer preferences, and the contentious debate over reclassifying streaming services as cable companies.
The Inevitable Decline of Digital Platforms: Understanding ‘Platform Decay’
Tech journalist Cory Doctorow introduces the concept of ‘platform decay,‘ a phenomenon affecting popular online platforms like Facebook and Google. He describes it as a cycle where platforms initially lure users with attractive features and privacy promises, then gradually shift focus towards monetizing user data and prioritizing advertisers’ interests. This transition often leads to a diminished user experience, marked by increased ads and altered content visibility. Doctorow’s discussion with Ari Shapiro highlights Facebook as a prime example, illustrating how platforms evolve from user-centric communities to ad-driven enterprises. This decay is partly due to a lack of competition, as dominant platforms buy out or price out potential rivals, and regulatory capture, where companies grow so influential that they can evade privacy, labor, or consumer rights violations.
The interview explores potential solutions to counter platform decay, emphasizing the need for legal and regulatory interventions to prevent monopolistic practices, such as acquiring competitors or engaging in predatory pricing. Doctorow points out ongoing legal efforts by entities like the DOJ and FTC to address these issues. He also addresses a critique suggesting that the perceived decay is merely older generations not resonating with the evolving internet, which caters to younger users. Doctorow counters this by expressing concern for the next generation’s ability to freely navigate and leave platforms that no longer serve them, indicating a broader issue of user autonomy and choice in the digital space. Read the full interview at NPR here.
Rising “Serial Churn” Rates Challenge Streaming Services as Consumers Seek Value
Recent data indicates a growing trend of American consumers canceling their streaming services, with the phenomenon of ‘serial cancelers’ becoming increasingly prevalent. As reported by ABC News, the monthly churn rate for major streaming platforms rose from 5.1% in November 2022 to 6.3% in November 2023. These ‘serial cancelers’—defined as individuals canceling three or more services within two years—now constitute a quarter of all subscribers. This shift reflects a consumer base no longer bound by loyalty, constantly seeking better value and content. Streaming companies, recognizing the trend, are expected to introduce more bundle deals and promotions to retain and attract customers. However, the industry’s profitability remains a challenge, with high content production and licensing costs, alongside regular price increases. The true scale of subscription cancellations is still uncertain, as precise data is closely guarded by streaming services. Read the full story from ABC here.
Subscription Healthcare Expands Beyond Contraception to Tackle a Range of Health Issues
Subscription-based online healthcare services, originally focused on areas like hair loss and birth control, have significantly expanded their offerings to address a wider array of health issues per CT Insider. Companies like Hims & Hers, Ro, and Lemonaid Health now provide quick access to specialists and continuous prescription deliveries for conditions ranging from weight loss to erectile dysfunction and mental health. This approach, likened to a Netflix subscription, aims to streamline access to healthcare and medication refills in the U.S. However, it has also raised concerns about the quality of care provided. Critics argue that this model prioritizes selling drugs over comprehensive healthcare, and there’s apprehension about the ongoing monitoring of conditions and medication side effects. Despite these concerns, the popularity of such services is growing, with companies like Hims expecting substantial increases in subscribers and revenue.
These services have capitalized on the convenience and familiarity of subscription models, offering patients easy access to treatment for specific conditions with predictable costs. However, the approach has its downsides, including potential issues with customer service and the quality of care. Critics, like Dr. Adriane Fugh-Berman, express concerns about the overemphasis on medication and lack of comprehensive care, highlighting the importance of therapies like talk therapy for mental health. While companies assert they monitor patients and provide comprehensive care, experts worry that the focus on specific treatments might overlook broader health needs. The model’s growth reflects changing consumer preferences and the healthcare industry’s need to adapt, yet it also underscores the importance of balancing convenience with quality and comprehensive care. Read the full article here.
2024: The Year of Ad-Supported Streaming Wars
The introduction of Amazon Prime Video’s ad-supported tier in 2024 is set to ignite the ad-supported streaming war, a realm dominated by services like Hulu and Netflix. This move is expected to intensify competition, leading to potentially lower prices and innovative product development in the streaming market. Prime Video’s strategy of automatically opting Prime subscribers into the ad-supported tier is projected to significantly boost its viewer base, putting it in direct competition with established platforms. However, this evolution in the streaming landscape is not just about viewer numbers; it’s about the changing nature of advertising. Ad buyers are eager for improved targeting capabilities and more precise audience measurements. The industry hopes that the competition will push streaming platforms to provide more detailed insights into ad placements and viewer engagement. But amidst these developments, there’s a wildcard: the unpredictability of advertisers’ budgets due to broader economic conditions. The outcome of this war might not only shape the future of streaming services but also redefine how advertisers allocate their budgets across digital media. Read the full article here.
Local TV Owners Push for Streaming Services to be Reclassified as Cable Companies
Local TV station owners are advocating for the FCC to reclassify streaming services like YouTube TV as cable companies, a move that could significantly impact the cord-cutting landscape, per Cord Cutters News. The Coalition for Local News, representing owners of local ABC, CBS, FOX, and NBC stations, argues this reclassification is necessary to protect local news and ensure fair compensation. If successful, services like YouTube TV, Hulu, and Fubo would have to negotiate directly with local station owners rather than networks, potentially leading to increased costs for services and, consequently, for consumers. This effort is met with resistance from the Preserve Viewer Choice Coalition, comprising streaming services and network owners, who argue that the current system better supports local news and offers more viewer choices. The debate signals a looming battle over the future of live TV streaming, with significant implications for service providers, content creators, and consumers alike. Read the full coverage at Cord Cutters news here.