Netflix Killed Cable TV. Now the Streaming Giant Wants to Bring It Back.

Netflix (NFLX) has spent the last 20 years trying to convince the world that cable TV is a huge waste of time and money. For generations, families paid hundreds of dollars for a zillion channels they didn’t have time to watch. Netflix turned that model on its head by giving viewers the freedom to ditch TV schedules and watch whatever they wanted on demand.

We all know how that’s worked out.

Cable subscriptions have collapsed, and streaming has evolved into the dominant force in home entertainment. Over the last decade, Netflix has grown into one of the most powerful media companies on the planet—and that growth has pushed big legacies like Disney (DIS), Warner Bros. (WBD), and Paramount (PSKY) to launch their own streaming services in a desperate bid to catch up.

At this point, it seems like there’s no going back to the olden days of cable TV, right? Believe it or not, the team over at Netflix disagrees.

In the most ironic plot twist you could ever imagine, the streaming giant is reportedly considering a whole range of live programming, always-on TV channels, and third-party streaming bundles.

It might sound counterintuitive at first, but Netflix’s strategy here is pretty clear. More important still, it’s an admission that streaming didn’t just solve problems for entertainment companies. It also created new ones.

Why Is Netflix Rethinking Streaming?

Streaming has brought a lot to the table, and one of its biggest selling points has always been the gift of unlimited choice. You can have whatever you want, whenever you want. But that gift of choice seems to have backfired.

We’ve all been there, right? You open Netflix, scroll for 15 minutes, and watch two trailers before you just give up and switch the TV off again. Psychologists call this “choice overload,” and there are numerous studies out there that demonstrate how it’s causing genuine mental stress for viewers.

That’s a problem nobody ever had with cable TV. Our parents would stick on ESPN, CNN, or HGTV and leave it running in the background for hours. Nobody picked what they wanted to watch, and TV was effectively ambient entertainment. It was always on while you folded your clothes, ate dinner, or scrolled on your phone.

Two decades on, Netflix is finally seeing the value in that model. Modern life is complicated, and sometimes viewers don’t want more choices. They just want to stop having to make decisions.

That’s why Netflix has reportedly started to plot out curated, always-on channels that are based around our moods, different genres, or themes. Instead of asking you to constantly pick what you want to watch, Netflix would just keep on playing content in the same way traditional cable channels always do.

But the streaming giant’s plans don’t stop there. Netflix is also looking into new ways to bundle third-party streaming services into its own platform and expand its live programming partnerships with legacy broadcasters.

That’s a pretty big reversal, but it’s also a pretty smart business move.

Think about it: Netflix’s streaming revolution totally broke the home entertainment model. We all left behind a big cable bill, sure. But now families are subscribed to so many different streaming services that they’re spending just as much (if not more) than they ever did on cable.

By bundling different streaming services and channels together, Netflix gets to charge consumers more in exchange for letting them consolidate their monthly entertainment bills. Viewers don’t have to waste hours trying to remember which platform owns what show, and always-on channels eliminate the stress of picking a program that everybody in the family likes.

If executed correctly, this direction could solve some of the streaming industry’s biggest problems. And win or lose, that has implications for the rest of the entertainment industry.

Why Should Wall Street Care About Any of This?

From a market point of view, this attempt to revive the old cable model is less about TV programming and more about consumer engagement.

Netflix has already demonstrated to shareholders that it knows how to win new subscribers. But other platforms are finally catching up, and so the real challenge for companies is keeping those subscribers logged in and happy. Every additional minute you spend on Netflix or Disney+ increases the likelihood that you’re going to retain your subscription to that service—and Wall Street seems to reward engagement just as much as subscriber growth.

That’s why businesses like Netflix and Amazon (AMZN) have invested so much in live sports, stand-up comedy specials, and everything in between. These experiences consistently engage audiences at higher levels and across longer periods of time.

Always-on channels can help Netflix to achieve the same objective differently. The longer you keep Netflix on your TV as background media, the stronger the company's competitive position becomes. This will place a lot of pressure on competitors to rethink their respective engagement strategies, and there’s a good chance it ends up with big media companies actually having to reinvest in a new generation of 24/7 TV channels.

You can imagine the frustration there will be in those upcoming boardroom meetings. But sometimes, innovation doesn’t always mean inventing something new. It can be as simple as fine-tuning and repackaging old ideas.

That’s why shareholders have got to stay tuned in, because this next phase of the streaming wars won’t be won by whoever signs the biggest celebrities. It’s going to be won by the companies that can keep users locked in by making watching TV feel easy again.