Before the 2010s TV was king; cable and satellite TV prices were skyrocketing and there were more commercials than ever before. If you wanted to catch your favourite program you had to cancel your social plans and sit at home with a TV Guide in hand.
However, all that changed when Netflix burst into popularity and transitioned from a delivery service to an online hub in 2007. This sparked a revolution that would completely change how we consume and create content.
The Rise of Netflix and Streaming
Since its inception in the late 90s Netflix (formerly known as Kibble) has always been an innovator, always creating new ways to create and consume content.
Starting from a small renting service which then transitioned to the first-ever DVD mailing service, it is no coincidence that it would be Netflix again who would introduce the world to digital streaming.
At the time, TV and cable were at their heights with commercials raking in bigger profits than ever. With a new model of distribution, Netflix was an industry disruptor, setting out to change the way people rented movies.
When they started in 1997, Blockbuster was king of home entertainment, this made Netflix’s mail-order DVD rental business unique. At first, many saw the company primarily as a distribution company but founders Reed Hastings and Marc Randolph had their eyes set on taking over home entertainment as a whole and they would use technology to do it.
When Netflix decided to pivot their entire business to streaming, many thought they were crazy. It was such a novel idea and streaming technology in 2007 was terrible. However, with interest in DVD as a home entertainment waning Hastings knew that their business model wouldn’t last. It was time to pivot and so Netflix went all-in on streaming video.
Launching streaming services in a market that was dominated by traditional cable proved to be a blessing in disguise. It provided Netflix with the space to innovate, develop and test their ideas with little competition.
The result was a pretty impressive service that took the world by surprise. Starting with House of Cards the company went to produce a number of award-winning shows that redefined it as a TV and movie studio. With this fame, came subscribers, in the millions.
After carefully developing the technology and the business model from 2007 through to 2015 Netflix was now an unstoppable giant. Accruing millions of subscribers each year, the company achieved the impossible in 2017 when the total number of Netflix subscribers eclipsed the total number of cable subscribers in the United States. The company had effectively become the ‘largest entertainment provider in the world.’
Traditional TV networks who were now bleeding subscribers by the millions were keenly watching Netflix and wanted a piece of the pie.
This led to an explosion in the number of streaming services all over the world as companies now recognized the potential of streaming.
The Streaming Wars: The Battle for Subscribers
The success of Netflix not only in America but all over the world (obviously) attracted a lot of attention, not least from traditional TV networks who had now come to the realization that the age of cable TV had come to an end.
The result was an explosion in the number of streaming services, especially during pandemic lockdowns.
Today we have hundreds of streaming services all through the globe as each tries to carve out a niche in a specific genre or a specific region. Most of them have however not been able to seriously challenge Netflix’s dominance but a few are worthy mentions.
With a gross revenue of just over $25.2 billion and a subscriber base of just over 200 million, spanning over 22 countries and counting, Amazon Prime is perhaps Netflix’s biggest competitor. And with big-budget shows such as the much-anticipated tv show Lord of The Rings: The Rings of Power a spin-off of the Lord of the Rings stories by J.R.R Tolkien, we are set to see the competition get a lot hotter.
Disney+ comes a close second when it comes to Netflix’s competitors. In fact, recent statistics might even indicate that it is in a prime position to overtake Amazon Prime making Disney+ Netflix’s biggest competitor.
With a market share of over 116 million people spanning over 53 countries all accrued within two years of its launch, it is easy to see why so many people are priming Disney+ to overtake Amazon Prime in the coming years.
As the media and entertainment distribution division of the Walt Disney Company, the platform enjoys a wealth of content from National Geographic, Star Wars, Marvel etc. Couple these with the fun associated with theme parks and Disney characters and one can clearly see why Disney+ is succeeding.
Launched just two years ago on May 27, 2020, HBO Max has performed pretty well. With a subscriber base of just over 69.4 million and $6.8 billion in yearly earnings, HBO Max has a pretty decent portfolio.
HBO Max offers limited to gold, meaning it has fewer original titles but really good ones. It mainly targets Older Gen X and Millennials between the ages of 25 – 44 years while Netflix targets 18- to 34-year-olds.
HBO Max also offers only one subscription which is priced above Netflix’s basic and standard plan but below their premium plan.
Although not as big as its rivals, Apple TV+’s affiliation with the Apple brand has been enough to attract the viewership of about 40 million millennials across 107 countries. This has been able to generate a decent revenue of $912 million.
The service has continuously invested in creating star-studded shows and signed in some famous Hollywood writers, directors and actors to develop TV shows like no other.
Impact of Streaming
With an ever-growing number of subscribers across various streaming platforms, one thing is made clear: the era of traditional cable and satellite television is over.
Streaming platforms are not only covering TV shows and film but are also venturing into sports and live TV news. Growing viewership on platforms such as ESPN+ and increased viewership of network tv news on Youtube indicates that audiences increasingly prefer streaming over traditional TV.
Binge and Ditch Mentality
With streaming platforms being launched every day, audiences have been inundated with a multiplicity of choices in content and platforms.
While a large number of options is good for a diversity of options it can sometimes lead to ‘choice paralysis’ where a consumer is unable to choose a single option among the multiple, he/she has in front of them.
With the increase in options, consumers are also less loyal to any single platform. They employ the ‘binge and ditch” strategy where they are willing to try but also prepared to cancel any service.
According to a Kantar Profiles and Facebook study, 57% of respondents say “It’s hard for me to remember which content (e.g., series, movies) is available on which streaming service.”
Streaming is certainly the future of home entertainment but with today’s cancellation rates also high there is a new demand for a better solution. One that will allow consumers to enjoy content without having to commit to a single platform.
But, before then between all the passwords, payments and overwhelming options, streaming services are starting to be more work than they are worth.