Four years ago, when Disney+ was released, I had a feeling it was the beginning of the end for the golden age of streaming. I recall telling my brother that every other channel would create their own streaming service, and we would essentially create “Cable 2.” The beauty of ad-free, affordable streaming just seemed too good to be true.

Less than a year later, at the peak of the pandemic, HBO and NBCUniversal proved me right by creating their own streaming services: Max (then HBO Max) and Peacock, respectively. In the years to come, more and more streaming services would pop up, merge or rebrand, leading us to the media hellscape of today. No longer is it solely a game of Netflix versus Hulu; nowadays, there are countless other options and bundles to consider.

But how exactly did we get here? How did we reach a time where streaming services are churning out original content like cable networks, and where Hulu has hiked its price for the third time in a year? It all started with a software company setting an unsustainable precedent.

Netflix started as a DVD rental service in 1997, launched a website the following year and created its first subscription service in 1999. This subscription service was a primitive version of what we know today, offering unlimited rentals and no late fees. By 2000, Netflix incorporated an algorithm to personalize movie recommendations based on users’ previous ratings. Sound familiar?

Netflix introduced streaming in 2007, and in 2008 Netflix offered its cheapest unlimited streaming subscription for only $9 a month – God, those were the days. 2012 marked the first Netflix originals, in the form of a stand-up special by Bill Burr, followed by typical television programming the next year. Feature films, interactives, games and awards followed in subsequent years. Why is this model a problem? It has something to do with the economics of entertainment – the business in show business.

Netflix started as a software company, but show business functions a bit differently than other industries. One commonly cited difference is high sunk costs, meaning entertainment companies have to front a lot of money to create their product in the first place. Another, the process of syndication, by which old cable companies used to make the majority of their revenue selling rerun rights to various local television stations.

All this business jargon is to say that software companies don’t function in the same way that entertainment companies do. Netflix sees the industry in a way similar to other industries: more product equals more money. However, film and television aren’t so simple.

The high sunk costs of creating films and TV shows means that companies have to be selective with which ones they greenlight, and be confident in a return on investment. In the cable days, this meant having pilot episodes before ordering entire seasons, gauging success by Nielsen ratings and selling rerun rights and advertisements to offset costs.

On streaming, Netflix does the opposite. Entire seasons are released at once, to be watched at any time, in hopes of gaining revenue through new subscribers rather than advertisements or syndication. This was the appeal of Netflix; tons of shows and movies anytime, with no ads, for a reasonable price.

This model was only sustainable so long as the only alternative to Netflix was cable, but we all know that didn’t last. As competition popped up, Netflix had to contend with costs of producing original content and the loss of existing IP to their rivals. Networks and conglomerates entered the streaming competition with a greater understanding of entertainment revenue – many releasing their services with ad-supported tiers from the outset – and a reputation for their original content.

However, without ads and syndication, shows with upwards of three seasons generate far less profit. The replies in Netflix’s posts on X, formerly known as Twitter, are riddled with demands for the resurrection of fan-favorite shows, and highly rated titles often go without new seasons. This disparity is also noticeable in Netflix’s prices, which are higher than every other streaming platform by a large margin.

HBO, a company already known for elevating the cable experience with their own subscription-based, ad-free service, has a far more sustainable business model with arguably better content and a lower price tag. In many ways, the HBO and Max business model still emulates cable: one episode is released a week for original content, it has an ad-supported tier, and it even carries live sports now. Its original content is also talked about for longer – House of the Dragon, Succession and White Lotus are just a few of the shows I’ve seen frequently mentioned on my X timeline for weeks. I’d wager this is because HBO is an entertainment company, owned by an entertainment company, all of whom understand to an extent how the entertainment industry functions.

Hulu also has its own cable-like gimmick, in that shows that air live on cable networks are available to stream just 24 hours later. Hulu additionally carries a live TV option, where live television is available through the streaming service as a supplement. However, neither Hulu nor HBO were the first to establish streaming; it was Netflix that became the model upon which consumers placed all their expectations and understanding.

Now that Netflix and other streaming services are hiking prices and introducing more ads, we all long for the days of Netflix’s unsustainable model. Unfortunately, what we’re seeing now is likely a necessary market correction.

I’m still going to cancel my Hulu when they hike the price again, and I’ll forever complain about Netflix’s new household software, but it’s important to understand the driving force behind the current media landscape is a bit more complicated than “Ugh, capitalism.”

Most of my generation has abandoned cable beyond what we can get for free, and it’s likely to stay that way. However, in order to maintain content creation at the rate we’ve come to expect, streaming will continue to cable-ify itself until it’s nearly indistinguishable from the old model. But hey, at least we get to watch on demand.