The Difference Between Monopsony and Monopoly (And Why It Matters To Your Favorite TV Show)

Favorite streaming giants like Netflix, Hulu and HBO Max, which have been havens for freedom-fascinated creators making shows that never fly on television, are increasingly relying on tactics like subscription pricing. you’ve probably noticed that. Hiking and a shift towards cheaper, formulaic (aka “safe”) content.I am also adding ad break. Why did this happen? The root cause can be explained as monopsony in action.

This is not a typo. Monopsony is an economic concept that differs from traditional monopolies and helps explain what’s happening with streaming services in 2022. Favorite TV show.

Difference Between Monopoly and Monopoly

Both monopoly and monopoly refer to the situation in which a single entity dominates the so-called free market. The difference is who is in control, the seller or the buyer. A monopoly is one seller and many buyers, and a monopoly is he one buyer and many sellers. In a monopoly, the buyer retains all power when the monopoly controls the market by preventing competitors from selling the product.

A textbook example of monopsony is a milk processor that is the only option for dairy farmers looking to sell their dairy products. This forces these farmers to sell cheaper. More topically, investedia Amazon claims to be a monopoly. sole buyer Then of the specific products you sell on the platform. Amazon can easily be explained as a monopoly as well. The two terms are born of each other.

What is monopsony in streaming TV?

Understanding how monopsony works helps explain trends that have impacted audiences. From Amazon’s acquisition of MGM, to Disney’s acquisition of his 20th Century Fox, to the recent merger of Discovery and Warner Bros., as companies continue to consolidate, more decisions about which shows will take place.Meanwhile, the streaming service that faces a pinch plummeting stock prices When huge debtpulling back, canceling shows more quickly and making big bets less.

Suddenly, the “sellers” (the people who put on the show) are facing a market with a smaller number of reluctant buyers. Comedian Adam Conover, who has produced shows on both his cable and streaming his services, explains: Washington Post, “Only a few of the top deal-fulfilling CEOs can benefit, while everyone else loses.” The less ambitious projects we deliver have gotten off the ground. On the other hand, the streaming service, which is the purchaser,There seems to be a growing preference for cheaper, unscripted fareswhich further narrows the creator’s options.

TV may not bother you Reduced rewards for creatorsBut it has more impact than that. If a handful of executives had all the purchasing power of streaming her content, they could determine what kind of content viewers wanted, control prices, and set terms. According to the results, Washington Post: Back Catalog be scrubbed without warning, less risky programming and higher prices for subscribers. In short, Monopsony doesn’t nurture creativity or give you the resources you need to make groundbreaking television.

In many ways this is nothing new. Actually getting the show on screen has always been a high hurdle. Simply put, the demand for content has skyrocketed, filling up a host of new streaming services. created a bubble market operated primarily by speculationas networks competed to acquire high-profile talent in the hope that subscribers would continue. cut billions From the market capitalization of streamers, they feel more selective— and they’re the only ones who know the data that determines if a show counts as a hit or not canceled after the season.

Conclusion

The semantic difference between monopoly and monopoly is less important than the big picture. There’s no guarantee that the shows you actually want to watch will stay on the service you’re paying for. The kind of innovative show that grabbed your attention in the first place.