The Blog

The Great Streaming Race

SeptemberBlog

For nearly 100 years, televisions have provided generations with news, sports and the wonderment of whole new worlds. But with each era, there have been headaches that have come with enjoying the small screen. After sending dad up to the roof to fix the antenna and dealing with cable companies inevitably hiking the bill, today’s “headache” is a different question: Is there too much TV? With more players entering the market, how does one choose what to watch and where? For better or for worse, the growth of streaming services and endless amounts of content is leading us into the future.

And, it’s a future that is staring Netflix right in the face. For years, the streaming-giant has been the pioneer in reimagining how television is consumed. Even when it began its DVD delivery service in the late 90s, the idea was completely novel. Then, Netflix launched its streaming platform in 2007 and is expected to spend $15 billion on content in 2019.1 While Netflix got a jump on the competition (more than 60 million subscriptions in the U.S.), other players have been racing to catch up and the pack is starting to thicken.

Hulu has long been a rival of Netflix with 28 million U.S. subscribers.2 Amazon Prime Video is buoyed by the other perks a Prime membership includes, but has 40 million Video subscribers. Even Apple is getting into the streaming video race as well. But the biggest entrant to race is expected to come later this year with the launch of Disney+.

The question becomes whether a company like Netflix, which has done something so well for so long, keeps up. Disney, known for being a money-making juggernaut (something Netflix is grappling with), figures to make a giant splash with its licensing and creative power. The other players, like Amazon and Apple, have additional revenue streams to subsidize the creative process—Netflix doesn’t have the same luxury.

Netflix is investing in its future by creating massive amounts of original content, which is a key driver of new subscriptions and keeping users watching. For example, among the nominees in six key Emmy categories (drama and comedy series and best actress and actor in both), 55 percent are from shows produced by streaming or subscription-based services.

We predict that the consumer pie will continue to grow because people love to watch television; the slices of the pie will just get smaller as more options become available. With live TV options like Hulu + Live TV and YouTube TV along with all the streaming options, consumers are faced with a television food court with only one meal available.

The lesson to be learned from Netflix’s position is that no matter how much demand there is for a product or service, companies always need to look to the future and work on evolving and innovating. It will be interesting to see as television evolves if Netflix will continue to be at the forefront, or if it will get passed by as the competition grows.

 

 

1 https://variety.com/2019/digital/news/netflix-content-spending-2019-15-billion-1203112090/

2 https://www.cnbc.com/2019/05/01/hulu-gained-twice-as-many-subscribers-as-netflix-in-us.html

 

 

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