Dig your foxhole and prepare for battle. Based on recent surveys, three-quarters of Americans would pay up to $30 a month for streaming services, depending on the type of content, and the number of ads present. Given this and the tremendous success Netflix has enjoyed, many other new streaming services are now surfacing. The “streaming wars” are heating up, and 2020 looks to be a year full of battles between these new players.
For some time now, Netflix has remained the victor when it comes to streaming wars. In fact, it has hardly been much of a competition as of late. Over the last decade, Netflix has seen a 4,000 percent return on its stock value. One hundred fifty million subscribers to their network have accompanied this. But times are changing, with many new streaming services launching their own platforms. And with billions of dollars at stake for all of them, there is little doubt the streaming wars to come will be highly competitive.
New Streaming Services Hit the Market
Netflix hasn’t been the only streaming service from which to choose. Other streaming options have included Hulu, which is owned by Disney, and Amazon Prime Video. But in recent months, more competitive products have hit the market. Apple launched its new streaming service in November called Apple TV +. Likewise, Disney + was released the same month and has done remarkably well since. The success of these new streaming services have had suggests they are just getting started. So, all indications suggest major streaming wars about to begin.
In the coming months, other new streaming services will also launch. Specifically, Warner Media, recently acquired by AT&T for $85 billion, will launch HBO Max in May. Comcast, which owns NBC Universal and Hulu, plans to introduce Peacock around the same time. And Quibi, which is short for “quick bites,” plans to reveal its new short film streaming service sometime in 2020 as well. Each of these ventures has invested billions of dollars, so it only stands to reason streaming wars amongst them will follow.
Streaming Wars Will Bring New Opportunities
For some time now, Netflix has provided great streaming content without the burden of advertisements. A low monthly subscription allows “streamers” to enjoy a vast amount of content without interruption. But with new streaming services, this will likely change both consumer mentality and payment packages. In fact, surveys support the fact that millions of consumers will tolerate ads if the monthly costs are less or nonexistent. This means consumers will likely enjoy a variety of new options in how to go about accessing these new streaming services.
Prior to now, Netflix has had few competitors, which has enabled it to enjoy tremendous growth. But streaming wars have already started in terms of acquisition of content. Content owners and producers can now demand a higher price and hold out for the highest bidder. This makes it more difficult for Netflix to keep its existing content without raising subscription rates or including ads. In fact, new streaming services are offering a combination of ad content and subscriptions to appease a larger customer base.
Who’s Likely to Win the Streaming Wars?
If you’re keeping a scorecard for each of the new streaming services, it’s difficult to predict who might come out ahead. Betting on Netflix is certainly a good option given its major head start. The company, however, fell short of its expected projection to gain 600,000 new subscriptions in the U.S. in the fourth quarter. The array of streaming services is putting Netlix’s new U.S. subscribers at bay with only 420,000 to date. Though Netflix might lose millions of subscribers, this will be a small percentage based on its current clientele. Likewise, Netflix invested over $15 billion last year alone in new content development. In all likelihood, Netflix will remain a major victor when the dust of the streaming wars settles.
Among the new streaming services, there is little doubt that Disney will do extremely well. (We have a story on Netflix vs Disney. Read it here.) In fact, its hit Disney+ show Mandalorian has peaked with over 140 million hits. And since Disney owns 21st Century Fox content and other streaming products like ESPN+, it will undoubtedly do well. Similarly, Comcast and NBC Universal will also likely be a market leader based on Hulu’s existing success and its coming launch of Peacock. Overall, these companies are among the most likely to win the streaming wars in the short term.
Moving into New and Unknown Territory
While the previously mentioned new streaming services are likely to excel, the current media and entertainment market is rapidly changing. Because of this, it is difficult to predict how consumers will respond and how they will shape streaming services. For example, Apple TV+ has not done as well as expected when compared to Disney. And new concepts like Quibi, which plans to introduce in-between length entertainment programs, could revolutionize the market. Companies like Quibi represent the industry’s outliers that might end up doing extremely well.
As an overall assessment, the best bet is that Netflix, Disney, and Comcast will be the leaders in the upcoming streaming wars. Others like Warner Media, Apple TV+, and Amazon Prime Video will also be new streaming services that will compete well. And companies like Quibi might surprise us all and create an entirely new market among streaming customers. But these reflect the victors in the short term who may or may not be on top years later. Predicting who might win the battle in 2020 is easier than forecasting who will eventually win the overall streaming wars.