The streaming war has just started this year, but things are quickly becoming messy. There is a list of new players entering the market end of this year and beginning next year. And the question will be: Who will be successful and what will this competition mean for customers?
But first a bit about the new competition of Netflix, Amazon Prime Video and so on. Streaming services Apple TV+ and Disney+ are expected to officially launch in November. Additionally, HBO Max (Warner Media) will launch in April 2020, just as the streaming service Peacock (NBCUniversal).
And these new players are serious about their market participation. Disney banned all Netflix ads from their TV networks, which among other channels includes ABC and ESPN. Meanwhile, Apple banned the Amazon Prime Video app from its app store for a short period last week. And HBO Max and Peacock are getting ready to promote their service with heavy marketing as both services are expected to spend $300 million and $100 million on advertisements respectively. But that’s not all. Disney’s CEO resigned from the Apple board – in the same week when Apple revealed more details about their streaming service in early September.
Despite all these efforts, experts and analysts expect Disney to take over this streaming war and eventually bypass Netflix as market leader. Analysts praise the company’s strong brand recognition, wide range of premium content and extensive ecosystem to market the service. In addition, Disney is not a rookie in the streaming game. Disney already runs ESPN+ successfully and even plans to offer pricing bundles together with Disney+. In addition, Disney holds a 60% share in well-established U.S. streaming service Hulu, which already has 25 million subscribers.
All this noise in the market does not quietly pass by Netflix. Its shares fell by roughly 30% in value since Q2 2019 when the company reported to have lost 126k subscribers in the United States. And according to analysts this trend will continue as they suggest that Netflix’ U.S. market share of currently 47% will go down to 34% by 2022. The biggest challenge for the streaming giant is the fact that competitors will take away the licenses of some of Netflix’ most successful content such as ‘Friends’ and ‘The office’. Additionally, Disney will move all its Marvel and Pixar content to its own platform. Currently, Netflix originals take up 30% of the time subscribers spend on the platform. And Netflix surely aims to increase this ratio.
Apple, on the other hand, is difficult to place in this war. The company seems to follow its own objectives. And according to experts, this is just another move of the company of spending a few billion dollars to keep its customers in the hardware ecosystem.
So, what does this mean for consumers? Consumers can look forward to penetration prices and a wide range of high-quality exclusive content, which is currently the main differentiator between the streaming services.
Sources:
https://www.digitaltrends.com/home-theater/streaming-war-disney-bans-netflix-apple-drops-amazon/
https://edition.cnn.com/2019/09/18/media/streaming-wars-scorecard/index.html
https://www.ccn.com/streaming-wars-heat-up-as-disney-crosses-swords-with-netflix/
https://www.latimes.com/entertainment-arts/business/story/2019-10-09/can-netflix-maintain-dominance-over-new-streaming-services
I think many of the Netflix users are confronted with recommendations of content we’ve already seen or we don’t want too see. Whenever I changed from Netflix-account to someone else’s subscription Netflix actually lost all of its AI data about me. It would be a great innovation for Netflix if one has the ability to take his or her specific profile information to subscriptions paid by someone else. I’ve been telling my mom to terminate our Netflix subscription for a while now as I haven’t been watching for a couple of months now. But all of this is a personal experience ofcourse.
Interesting article Kim! I’m intrigued about the future developments in the streaming market as well. Do you think all of these players will persevere in the long term or will it become a “winner takes all” situation? I reckon that Disney has the means to find its own niche and value proposition that’s different from Netflix, whereby consumers might be tempted to subscribe to both services.
Interesting how this industry has changed so rapidly. It is also interesting how Disney has banned the advertisements of Netflix on all its channels. In my opinion this looks like anti-competitive behavior from Disney and I wonder if the Free Trade Commission will investigate their practices. It is a recurring theme, large companies abuse their power to drive players out of the market and create a winner-takes-all market.