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Who Will Win the Streaming Wars?
By Ben Spaeth
Photo: Forbes – Source
Nowadays it seems as though new streaming services are popping up every month. Within the past few years, new players have risen to challenge Netflix for the king of streaming title. But how sustainable is this rapid expansion of streaming services? Surely, at some point, a platform won’t be able to accumulate enough content to continue to attract enough subscribers to justify the cost of servers. There are also only a limited amount of streaming services that the average consumer is willing to pay for.
Some have theorized that streaming will eventually follow the path of cable and lead to services becoming more and more niche. However, as shown by cable, an increase in the amount of channels leads to a fracturing of the audience, because the audience has more options to choose from, leading to lower viewership across the board. Streaming might be heading towards a similar fate. As streaming options increase, consumers are likely to be divided over which services to pay for.
Therefore, streaming services have to feature standout content in order to attract consumers to their platform. This has led to an all out war when it comes to purchasing streaming rights for particular IP’s. Streaming services are spending more than ever to gain the rights to popular franchises in hopes that the name recognition will lead to new subscribers. Netflix has seen the expansion of the streaming space coming for a while and has been victim of some of their more popular shows being pulled from the platform so that other services like Peacock can have recognizable content upon launch. Admittedly, Netflix never owned or produced any of the popular NBC shows on it’s platform, but not being able to renew agreements for The Office and Parks & Recreation certainly hurts when they’ve been staples of the platform for years. To combat this, Netflix has been throwing billions of dollars into producing their own original content. Other services have been doing this as well in order to build up a base of content that will never leave the platform.
This begs the question, do people actually stick around for this original content? The answer is fairly nuanced. New content usually does a great job in getting people to sign up for a service, but unless big titles are continuously coming to the platform, there seems to be a fall off in the following months. For example, when Wonder Woman 1984 was released last year, over 400,000 people signed up for HBO Max the same day. However, within a month over 25% of those people canceled their subscription and within 6 months over half had canceled. This isn’t an isolated incident either. Disney+ saw similar drops in the months following the release of Hamilton. This isn’t to say that these titles didn’t contribute to any gains for these platforms. HBO Max still netted around 200,000 subscribers from Wonder Woman 1984. What this demonstrates though is consumers’ willingness to drop a platform once they’ve consumed the content they wanted to see. The way to counter this would be to continuously add new and popular content to the platform monthly, but titles as big as Wonder Woman and Hamilton don’t come around that often.
When predicting which service will come out on top in this clash of the IP’s, the important factors are what content does each service have the rights to, what’s their current subscriber base, and does their original content have a fanbase. It’s easy to say that Netflix will continue to be the king of streaming for the foreseeable future. They have the biggest subscriber base out of all the platforms. They also have been around the longest and have accumulated a large base of original content. On top of this, a lot of their original content has seen critical acclaim and is popular with a broad audience.
The second biggest streaming platform at the moment is Amazon Prime Video. Prime Video being in second is slightly deceptive as Prime Video is attached to many people’s Amazon accounts. Prime likely has a future in the streaming space given the size of Amazon. Amazon also purchased MGM last year. Although currently MGM releases have been in theaters and not on Amazon Prime. What’s likely is that Amazon is recruiting film executives from MGM in order to help find releases for Amazon Prime Video that might be able to make the rounds in film festivals and possibly generate Oscar buzz. Amazon is also the only one of the popular platforms that allows people to submit content for a chance to be put on the platform. While it’s unlikely that Amazon is going to get any hits from this, it’s still a unique feature and allows for indie titles to be made available on a popular platform.
Disney+ and Hulu are currently neck and neck. Considering that there is an option to bundle the two together, this isn’t all that surprising. As streaming services begin to conglomerate, I expect we will see more platforms bundle their subscription fees together. This technique makes it a bigger decision to cancel a subscription because you’re not just canceling one service, you’re canceling multiple. Bundles are lower priced than individual subscriptions, making it more appealing to the average consumer. Also, both Disney+ and Hulu feature a lot of popular original content. Disney+ also has the advantage of having most of the MCU on their platform along with most of Disney’s catalog. Ensuring that the service will be relevant for years to come.
HBO Max is an interesting service because like Disney+, it features a lot of classic films from the service’s parent company Time Warner. Warner Bros. will also continue to put their films on HBO Max. Meaning that the platform will have continued relevancy. The platform also features HBO’s entire catalog of shows. Considering some of the greatest shows ever like The Sopranos, The Wire, and Game of Thrones are on the platform, HBO Max is ripe with content for TV and movie snobs alike.
As for newcomers like Peacock and Paramount+, it’s hard to see what specific niche they’ll fulfill that other streaming services won’t. Peacock having a free version is a great entry point for those that may be skeptical of the platform. Peacock also has a fantastic selection of TV shows plucked right out of some of the best NBC lineups, and their live TV options are pretty nice. Universal films will also be made available on Peacock 45 days after their theatrical release. This should help Peacock build up a base of new films.
Paramount+ is essentially a rebranding of CBS All Access. Paramount+, like Peacock, has a lot of great shows from the various channels owned by ViacomCBS. ViacomCBS is also investing heavily into creating new content on the platform like the new Halo TV show and Star Trek: Picard. Paramount+ also has access to most Paramount films.
All these streaming services have the backing of a well established film studio, so it’s hard to say if any of these will ever fail. Especially as these studios begin to incorporate the release of their films onto these platforms. We’ll likely see any further attempts to enter the streaming space fail as they won’t be able to compete with the vast catalogs of these titans. If any of these services are in a position to fail at the moment it would be Netflix because of the continual loss of content the platform faces along with the billions they spend each year trying to produce new content and rising rates for their users. However, I don’t think it’s realistic that Netflix will fail at any point in the future. They are the name brand of streaming and currently are establishing themselves as a film studio to be rivaled. They also have a strong subscriber base that has taken the price hikes in stride throughout the years. As for the other services, Peacock and Paramount+ are still too new to judge and Disney+ and HBO Max are clearly going nowhere for the time being. Apple TV+ is worth discussing in the possible fail category as it offers the least content of all the services mentioned. However, it’s backed by the most valuable company in the world and features numerous popular shows like Ted Lasso.
The new king of streaming will be crowned in the coming decade. Voting with your dollar has never mattered more than it does now. The future of these major film studios will be decided based on the popularity of their platforms. It’s also worth noting that any service that goes under will have incredibly valuable assets in the form of streaming rights. Streaming rights have never been more valuable and in the future where companies will be starved for content, any blood in the water could lead to a massive bidding war.