Since 2007 entertainment has been revolutionised by trendsetter Netflix, which has changed how we consume our favourite TV shows and films.
The Silicon Valley heavyweight no longer commands the dominant position in the streaming business but with 223mln subscribers it is still a very strong contender, something that it recently reminded its investors.
Slowing growth, and even one print showing a decline in users, had spooked the market.
Though more recently Netflix’s third quarter saw subscribers rise by 2.5mln reversing a trend of desertions that had resulted in 1mln leaving in one 4-month period.
If it can’t grow significantly in terms of users, the aim is to grow in terms of revenues.
One such effort sees Netflix give subscribers a quid pro quo, offering a lower-priced version of the streaming service that includes advertising – opening up a brand new revenue stream for the platform.
However, it has so far seen a lukewarm reception which to some extent underlines how much pressure it is under.
For one, content creators are angered that the ad revenue generated will not be shared and as content king in streaming, rivals likely sense an opportunity.
The world’s biggest ‘legacy’ media firms are in a phase of reinvention, albeit they remain relative newcomers to streaming, nevertheless, with decades of production and intellectual property behind them have made quick inroads into Netflix’s near monopoly.
Discovery+ has for example amassed some 24mln customers since its launch in 2021, and, in early 2023, the service will merge with HBO Max (as a result of Warner’s acquisition of Discovery) consolidating a total subscriber base of around 101mln.
Disney+ which brings together all things Mickey, Marvel and Star Wars meanwhile counts around 164mln subscribers worldwide, though Disney’s numbers rise to 235mln putting it shoulder to shoulder with Netflix once ESPN, Hulu and Fox are added in (they’re packaged up in a variety of service bundles depending upon where you are in the world).
Knocking Netflix off its perch (by about 3mln subscribers) has not been cheap.
Disney reports losses of almost US$1.5bln amid its expansion, and, like Netflix, it has had to look to advertisers to supplement some of its revenues.
Amazon Prime, bundled with the premium shopping and delivery scheme, meanwhile, totals 200mln subscribers which cannot be ignored, though it has been less of a like-for-like competitor.
Jeff Bezos has though invested billions in acquiring film rights and producing original content, combined with the unique offer of prime delivery.
Amazon is, of course, some seven times bigger than its streaming rivals and through AWS owns much of the infrastructure of the internet, so it would be unwise to write it out of the race.
Elsewhere, Apple TV and Paramount+ also have a part to play, both in terms of tech and IP, though each carrying some 50mln subscribers they remain some way behind.
Quite how it will all play out is yet to be determined, but the sums being invested are substantial and someone has to lose out.
Alas, the true victim of the streaming war might yet be the consumer, as favourite shows become split across more platforms and prices rise it’ll be the user forking out.