The game is on. After year’s of market domination by Netflix, the streaming market is currently going through rough waters. Company after company, they’ve all announced their own streaming service. Walt Disney Corporation just started its exclusive trial of Disney+ in The Netherlands, after it will be launched in US and Canada November 11th. Apple will launch its Apple TV+ this November 1st. And all this is happening in a streaming landscape where Netflix, Amazon Prime, Hulu, Youtube Premium, HBO Now/Max, CBS All Access are already fighting for market share. Next year, both Comcast’s NBCUniversal and and AT&T’s WarnerMedia will launch new streaming platforms. It’s quite crowded, to say the least.
So what might be the key to success that decides who’s winning and who’s losing this war? The first step in winning the game might be all about channels.
Last Monday, Apple did something quite clever. They announced that, if you buy a new iPhone, iPad, or Mac, you will get one year of Apple TV+ for free. This means that dozens of millions of people will be automatically subscribed to Apple’s streaming service in the coming few months.
Disney might do something similar with Disney+. What if, if you buy an entrance ticket to one of its Disney Theme Parks, you get a trial version of Disney+? Or Comcast’s NBCUniversal, that already owns 22 million paid TV subscribers in the US and could provide pre-installed free trials to all its customers right on their own tv boxes?
Obviously, the second step is to retain those customers. That is where content comes in. If the content is not appealing enough, trial consumers will not resubscribe. Yet, content, previously distributed by the incumbent streaming services, such as Netflix or Amazon Prime, is now brought back to its owners, such as Disney and Warner. It will be harder than ever to find a streaming service that airs all your favourite films and series.
Interesting to look at in the coming years, is if the long tail in the industry will become shorter again. Producing high-quality content is capital intensive. And as the landscape is becoming more and more dispersed, each streaming service might have a smaller piece of the pie. How will streaming services execute their content strategy? A few very expensive blockbuster films and series, or a lot of cheaper ones created for the niche? Each streaming service will decide for their own what suits them.
What do you think that will decide who will win this streaming war? Or do you think there will be only losers in the end?
References and further reading:
https://www.bloomberg.com/news/articles/2019-08-01/the-streaming-video-on-demand-war-is-going-to-get-bloody
Why Consumers Are Already Losing in the Streaming Wars
https://www.statista.com/statistics/497279/comcast-number-video-subscribers-usa/
Hi Bas,
Thanks for this interesting blogpost! I can fully recognise the high amount of streaming services offered and the increasing competition among them – where Netflix was the obvious choice the last few years, people are switching more and more towards other streaming services like HBO and the Dutch Videoland.
However, I don’t think these services will keep fighting for their market shares forever among each other. To be honest, I actually think this disrupted market will be caught with another disruption again – namely by centralisation. In this era, consumers want to have all their options in the same platform for convenience reasons, WeChat being the perfect example as can be seen from its tremendous popularity. People don’t want to have several subscriptions to be able to watch Friends on Netflix, The Avengers on Disney+ and Game of Thrones on HBO – they want to open one app on their mobile devices and subsequently to be able to access all content at once. I believe it will only be a matter of time before a media giant starts developing such a platform and negotiating with all mentioned streaming services to be able to combine all content together.
That having said, it will not be easy – after all these companies have been rivals ever since this market started developing! What are your thoughts? Who will be winning this war?
Hi Bas, I would first like to thank you for your insights into the streaming service markets. I personally am enjoying a free Disney + account until November. For me it is clear that there are new entrants into the market and that the competition among them is rising.
I would like to react on Isabel her comment of one central platform for streaming services. I do believe that the consumer, in the end, wants to have a single platform on which he or she can watch every show. However, I do not think that governments would allow for one central platform, because it would lead to a monopoly. I know that there are many US senators, US because most of the companies in this industry are located in the US, are against these monopolistic tendencies. Surely they would stop the merging because it would harm the costumer in the end.
The market will form into a winner-takes-all market, which will result in only three or four mayor suppliers of streaming services. Do you guys agree? or do you have a different point of view on this subject?