Long before Megan McArdle and I were friends and colleagues, we were doing what we do best: arguing with each other on the Internet about cord-cutting — the idea that people would give up their cable packages in favor of services such as Netflix and Hulu — and the future of television. When Megan uncovered an eight-year-old exchange between us, I asked if we could revisit it, and with it, our positions on what makes for a good value in entertainment and the impact of the fragmentation of mass culture. Here’s where we stand today.

Dear Megan,

One of the hazards of writing for a living is that sometimes you will be wrong. And recently, you unearthed an eight-year-old blog exchange between us in which I was very wrong about the extent to which the death of the cable bundle would be good for consumers. I wanted to revisit our conversation for a couple of reasons. It’s good for writers to acknowledge when we totally misread a situation! In this particular case, the reasons I was wrong about unbundling speak to a larger idea about which I was mistaken, with more serious consequences: that the increasing fragmentation of the media environment might be good for our culture in a whole host of ways. And I wanted to see how your thinking about the media business has evolved in the years since we last discussed this.

To summarize where I was, and why I was blinkered, eight years ago: I thought for a while that unbundling cable might allow consumers to direct their dollars to the content they cared about most in a more targeted way, making it possible for programming that had been labeled “niche” to demonstrate how strong its audience really was. Let a thousand television shows bloom! As you pointed out at the time, and as is increasingly obvious now as shows such as “Friends” and “The Office” disappear from Netflix and streaming services proliferate, the bundle was actually a pretty good deal for people, and the new environment is potentially more expensive, certainly more confusing, and risks makes pop culture consumption a lonelier enterprise as we all watch our own favorite shows and movies on our own timelines.

That said, one thing I think I did get right was that the decision companies like Netflix, Hulu and our corporate overlords at Amazon have made to get into original content, which was barely on the horizon in 2011, has produced a lot of great and strikingly original storytelling, and has put pressure on both the cable and the broadcast networks to innovate. I think it’s great for consumers and for the medium of television that shows such as “Orange Is the New Black,” “Transparent,” “American Vandal,” “Mindhunter,” “Unbelievable” and “Ramy” exist, and that in moving away from the so-called Least Objectionable Program, weird, wonderful shows like “The Good Place” have been able to stay alive on broadcast television.That said, it’s going to get even more overwhelming when consumers have to decide whether or not they’re going to add such services as HBO Max and Apple +. So much to watch, so much of it so good, so little time, and at what cost? It’s a muddle. What do you make of it?

-Alyssa

Dear Alyssa,

As I look back over that long-ago exchange (how is it possible that we’ve been doing this for eight years?) I see that I, too, made a mistake. In passing, I noted that reality shows proliferate because they get more eyeballs than “prestige TV”. That certainly can be true — “House Hunters,” which follows couples through a staged house hunt, gets tens of millions of viewers every month. But it is at least as important that most of these shows cost very little to produce, compared to a glossy drama. The “actors” often participate for free, and corporations often pay for product placement, either on the show or in the Instagram feeds of the star players.

I mention this first, because one good mea culpa deserves another, but also because in 2011, during our initial exchange, we were in the golden age of reality television. Cable providers were expanding the pipes that brought content to our house, and reality-show producers were rushing to fill those pipes with the cheapest, easiest content to mass produce, which is to say, ordinary people who were just thrilled to be on television and maybe compete for a modest prize that still cost the network far less than making one half-hour of a scripted show.

Now we’re in a very different golden age. Reality TV is still here, but no longer quite so ubiquitous or so central to the proverbial water-cooler conversation. Scripted television shows, on the other hand, have never been more numerous, or better, and I think at least part of that has to be put down to streaming — though also to other technological changes which made it easier for shows such as “Mad Men,” “Breaking Bad,” “The Walking Dead” and “Game of Thrones” to find an audience.

I won’t go so far as to say that every possible audience taste is being catered to — my two favorite shows, “Counterpart” on Starz and “Patriot” on Amazon, were just canceled this year. So clearly the Entertain Megan McArdle niche remains somewhat open. And I do wonder if those shows struggled to find an audience because the Entertain Megan McArdle niche is just too small to sustain a scripted drama, or whether the sheer volume of new offerings is making it impossible for really good shows, ones that would have been blockbuster hits eight years ago, to find their audiences.

Still, I think we have to agree that many more niches are being filled than were eight or 10 years ago, and that this represents a huge gain for people whose tastes are somewhat rarified. The problem, as I think you’d probably agree, is that those gains were costly. Huge sums are being poured into creating new content, including by The Post’s owner, Jeff Bezos, the founder and CEO of Amazon.

Though I have no special insight, I’d guess that Amazon is probably willing to lose a little money on Prime Video, using it as a loss leader for the other stuff you’ll buy through your Prime subscription. And Disney, which will soon be launching its own streaming service, can also probably afford to subsidize streaming in order to sell you action figures, plush toys and Walt Disney World vacations. But most of the rest of the services have to make enough money to cover the costs of all that content, far more than we’ve ever produced before. Or there will soon be a lot less content.

Golden ages often end in the sack of the kingdom, and I expect something similar to happen to streaming services. The American consumer probably can’t pay all that much more for content-plus-Internet than they did for their old cable bundle — and in an added twist, cable companies are probably going to have to start charging more for Internet, as cord-cutters snip away at the cross-subsidies from content sales that used to help defray the fixed expenses of the cable infrastructure. So household budgets for premium content may actually fall, at the same time as content providers are raising prices — or else we’re likely to actually end up paying more to replicate roughly what we had five years ago.

Meanwhile, I don’t think most of the standalone streaming services can survive. Amazon, yes, because it has another line of business; Disney, yes, for the same reason. Netflix, maybe, because its market share is so dominant; HBO possibly, though only if its executives find some must-see-TV to replace “Game of Thrones.”

But in the end, I expect to see most of the other streaming services bought or merged … in other words, bundled. And I expect the prices to mirror, or perhaps slightly exceed, what you would have paid for the equivalent amount of content under the old cable system, because that was what the content cost. Sports haters may save $10 a month that would have gone to ESPN carrier fees, but otherwise, I just don’t see where the fabulous savings we once imagined are supposed to come from.

In industries with high fixed costs and low marginal costs — a description that fits both entertainment and cable provision — bundles are the most efficient way to provide services. So I expect that’s where we’ll ultimately end up: in roughly the same place, after a rather wild and roundabout journey to get there.

-Megan

Hi Megan,

We’ve been talking about unbundling, cord-cutting and the explosion both in the number of television shows and in the number of outlets that produce and air them primarily in economic terms. And certainly, some of the resolution of this very unsettled period will come through the economic choices consumers make. Maybe the Apples and Amazons of the world will stay in the original content business because people just give up and decide to stay in the ecosystems where they are already plunking down time and money. Maybe sans the “Game of Thrones” dragons, HBO is going to have trouble holding on to subscribers’ money.

But there’s a cultural problem at work here, too. One of the defining aspects of cultural consumption today isn’t merely that people like to watch a lot of television, it’s that reading and talking and arguing about that television with other people have become, for many viewers, an essential part of the entertainment experience. The huge number of shows airing all the time may feel like a gift, but it also poses a challenge. At a moment when a show with fewer than a million viewers can stay alive on cable for multiple seasons, and a show, like “Brooklyn Nine-Nine,” that bobbed around the 2-million-viewer mark toward the end of its sixth season, can earn a renewal even on network television, you may well have a favorite show — and no one else to talk about it with.

What’s going to decide the streaming wars is not merely what people can afford, but which services and networks manage to produce content that feels not just intensely personally fulfilling to a small number of consumers but that feels essential to a large number of them. It’s very hard to do that consistently! The fact that HBO has managed to do it for so long, and under the leadership of more than one chief content executive, is fairly astonishing.

The question that will eventually face television executives and showrunners is one that the country is already grappling with in other arenas: How do you bring people back together after splintering them into niches that cater extremely closely to their needs? I don’t know the answer. I’m not sure a lot of programming executives do, either.

But one network and one executive I always keep my eye on when thinking about issues like these is FX and its chief executive officer John Landgraf, who is a candid and interesting thinker about the business that he’s in. Landgraf basically coined the idea of “Peak TV.” He had the research staff at the network start compiling a list of how many original series were airing in a given year, and distributed the numbers to television critics to make clear just how much television viewers had to choose from. He and FX were also somewhat early to the idea of launching a branded streaming service, FX+, which debuted in 2017. There are ways in which FX+ isn’t a perfect analogy for cord-cutting as a whole; rather than a stand-alone product, it was available as an ad-free add-on for people who already subscribed to cable. But all the same, what happened to it was instructive: After Disney bought FX’s parent company, FX decided to shutter FX+ and focus its streaming efforts on, you guessed it, being part of the Hulu bundle.

Until the rest of the industry follows suit, the Entertain Megan McArdle channel will be rolling out as an add-on to Quibi.

Cheers,

Alyssa

Dear Alyssa,

The danger of being an economics and policy columnist is that you tend to look at every question through the lenses of money, market structure and incentives. And, of course, you’re right: Wherever we end up, the cultural effects will be large. Indeed, already are large: It’s likely that the highest-rated episode of a television series in U.S. history has already aired. It was the finale of “M*A*S*H” and it aired in 1983.

It’s hard to understate the importance of a shift from an era when everyone except a few insufferable highbrows was watching one of three programs at the same time every evening. You talk about the fierce appetite for reading, discussing and arguing about television shows, and that’s obviously true — for why else would episode recaps be such a mainstay of Web journalism? Arguably, those recaps are a substitute for what all of America used to do over the water cooler the next morning. In their offices, where everyone went, rather than emailing each other, as I am now emailing you, from the privacy of their own homes.

But even those recaps feel like a bit of a holdover from a bygone and more coherent era. Websites can afford to mount a lot of coverage of a blockbuster show like “Game of Thrones” — but “Game of Thrones” first aired in 2011, when almost everyone was still getting their television through the cable box, and Peak TV was years away. As the offerings have multiplied, viewerships have fragmented — and while it may make plenty of sense for The Post to employ valuable writer time on “Game of Thrones,” it probably doesn’t for a show with fewer than a million viewers.

But that brings me back to market structure, because I think the answer to “how do you bring people back” is that a bunch of streaming services and cable channels either fail, merge and/or pull back their investment in original content, and people are forced to find shows that maybe aren’t *quite* so personally tailored. At which point, they will probably rediscover the alternate joys of sharing an experience with the people around you, even if that experience isn’t quite what you’d have chosen if it were just you doing the picking.

That’s not to say, however, that we’re ever going back to the old days of three networks that functioned as the center of the infamous “national conversation.” The equilibrium number of streaming services is almost certainly higher than three, and even when they’ve shaken out to their final number, people will be watching different shows at different times. As someone who remembers lying on our living room rug and watching that “M*A*S*H” finale with my Dad, that makes me sad — but then, I also remember a lot of really bad television and nothing else on.

That said, I think there is one critical problem we haven’t discussed: the lack of any reliable way to quickly transmit vital information to lots of people at once. I thought of this a while back when D.C.'s water utility had an issue that potentially contaminated the supply for thousands of homes — and my mother, who watches CNN rather than a local morning broadcast, had no way of knowing about it until I called her. Local news audiences seem to be in a slow-motion collapse, which will make it harder and harder to get people the emergency information they need to know.

But emergencies aren’t the only reason this matters. Consider the changes in the traffic laws that many cities will need to make to accommodate bikes and electric scooters on the roads. In the old days, you’d have gotten the word out to local journalists, and maybe run some public service ads on, say, the proper rules for turning right across a bike lane. But when an ever-increasing portion of your audience isn’t watching either local news, or even shows with ad breaks, how do you educate the public about new regulations? This is the job that television used to do, and before it, radio, and before both of them, newspapers. Who is going to fill the gap? These are just some of the questions that we’re all going to have to answer as America quietly shuffles off to 127 million individual living rooms to do its own thing. I hope we find something better than “Gee, that’s a real stumper, isn’t it?”

Signing off,

Megan

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