How much streaming is too much, and what’s next for these subscription services?
Social isolation has started to put a burden on people’s lives, creating a list of side effects that may include anxiety and boredom. While exercise, sleep, and meditation are all valid solutions to those adversities, something tells me that the first thing people do when feeling stuck at home is scroll through Netflix for half an hour to end up rewatching the same show for the 4th time.
Sound familiar? Well, it is. Netflix knows this behavior is so typical among its subscribers (since most of its non-original content is made up of successful long-seasoned tv shows) that it now expects this trend. In fact, it serves as a key performance indicator for the platform. But is comfort viewing all there is to modern entertainment today?
Actually, no. These days, streaming services are so common that broadcast media brands that don’t have one feel left out with no date for prom. And with so many in place, we can only expect more original content. Besides Netflix, Prime Video, HBO Max, Peacock, ESPN+, Hulu, and Disney+ are some of the places to find on-demand subscription content.
What sets the streaming pioneer apart in these streaming wars is a combo of first-to-market strategy paired with the amount of content they still own. But what once made it so successful doesn’t seem like enough to win the streaming wars to come.
I once heard a story of a big elephant facing off against a tiny mouse. The elephant was favored to win, and the mouse seemed lost most of the time. But as the rumor has it, elephants are scared of mice.
And this is another kind of mouse we are talking about.
The Walt Disney Company is that tiny but magic mouse. So far, he’s been used to running amusement parks, creating some very compelling stories, and making magic real for kids and adults in California and Florida. Except now, Mickey has decided he needs a break and will be in your living room a few hours a day with something much more potent than just the Disney Channel.
There is no doubt that Disney is a powerhouse to be reckoned with, no matter what product it launches. Even in the streaming space, Disney poses a much more significant threat to Netflix than the story told by subscription numbers. Disney’s intellectual property (IP) is too big to fail. But the big question still is:
The answer is: Yes, it certainly can! Besides, Disney+ couldn’t have hit the markets at a better time. You know, with the whole pandemic and social distancing situation. But being available in the US and UK at a time where the world is stuck at home isn’t what makes Disney+ valuable. It is its content potential.
Disney’s IP is so significant that it creates limitless original content branches. We’ve seen this with the Marvel Cinematic Universe and with the expansion of Star Wars into the exclusive Disney+ series, the Mandalorian. Knowing the creative minds behind The Walt Disney Company, this is not their last card to play in the streaming wars. That Magic mouse always seems to have a lot of cards up his sleeve.
With the company expanding one of its largest industry advantages, Disney+ subscribers can expect a lot more spin-offs and new series originated from deals with 21st Century Fox, Marvel, Pixar, Lucasfilm, and others. And hey, if that’s not enough, they’ll own Hulu in a few years.
In the green room
Or more like a mix of green and blue-feathered room.
Mid-COVID-19, in an off-season-like soft-launch, NBCUniversal’s Peacock TV promises to be a streaming service with enough power to create award-winning content consistently. Peacock finds itself within a news and entertainment conglomerate that often releases movies that quickly become all-time favorites, something I don’t see a reason to change anytime soon.
Peacock TV is likely to record significant increases in subscription once NBCUniversal’s original series are added into the platform. After all, people can only live so long without seeing Michael Scott grace their television screens. But subscription numbers are the least of NBCU’s worries.
NBCUniversal is counting on advertising revenue to make its free streaming option available to customers. A very interesting move, but understood since peanut butter and jam aren’t so close as advertising and media. Meanwhile, for those who don’t want to add another streaming service to their monthly bill, Peacock free is here for you.
Nonetheless, NBC has strategically placed itself as a large sports provider. With the increased US interest in soccer, it only makes sense that it’s unbeaten Premier League coverage will be next on the Peacock exclusives list. Pair the sports love with exclusive rights to the Olympic Games until 2032, and you have an almost perfect formula for success.
That is not to say Peacock will be the savior of streaming services. With a late entry to the game and the 2020 Olympics now being the 2021 Olympics, a lot of feathers are still up in the air. I am not sure Peacock can compete with the leading services in its first year, but its versatility in the sports world and news coverage makes it a contender.
Possibly the best-producing broadcast media conglomerate in the US, NBCU can’t (yet) rely on a pilot a month to entice new subscriptions. For now, its move to give Peacock access to Comcast subscribers sounds like an excellent long-tailed approach until the platform gains traction. And when it does, it can fly.
A blessing in disguise
When you already sell so much, why not video?
Amazon is playing its own kind of game by dipping its toes into everyone’s backyard pool. Jeff Bezos famously takes on many ‘secondary’ investments to his company’s primary strategy as the largest online marketplace in the US. Most of these investments get ditched quickly. But being the richest man on the planet gives his employees a combo of confidence and risk-neutrality to make some of those investments successful. Prime Video is one of them.
Being Netflix’s fiercest competitor, Prime Video is (almost entirely) positioned as a ‘free add-on’ to the more than 150 million Prime subscribers worldwide. And who doesn’t want free two-day-delivery?
“Thirty percent of U.S. households have a gun, and 64 percent have Amazon Prime.” Scott Galloway — The Four
Also, Prime Video is not only limited to the revenues of its video platform. As a part of the retail destroyer that Amazon has become, Prime Video will continue to grow as it has in the past years.
Prime is what has made Prime Video so easy to reach, and the streaming service has, in turn, made $119+ per year look a lot more appealing. Genius.
With increasing revenues and unlimited (investor) capital, a big decision arises: License content from others or produce originals?
Well, why not both? Since 2013, Amazon Studios have produced dozens of original movies, albeit with somewhat average box office numbers. Nonetheless, Prime Video offers 22,876 films in its platform, compared to the 3,751 that second-place Netflix put out. Ouch!
Let’s not forget, though, that as a subscriber, you can watch Thursday Night Football, CBSN, Warner Brothers movies, the Tennis Grand Slams, 30 MLB Games, and add premium channels like HBO, all in one platform. Very on-demand. Sounds a lot like a marketplace for content, huh?
Bezos’ secret math shows an increase in Prime subscriptions when its daughter company Prime Video is successful.
The plan is still to build up content licenses from other studios and make Prime Video a streaming service steam-roller. Prime Video doesn’t need to make any promises, and its potential to grow is nonetheless equal to a giant like Amazon. Could you imagine Netflix content with Amazon money?
Disappointing box office numbers don’t worry Amazon for now. It’s still dipping its toes in the content pool. The next thing on the schedule: Ask Alexa for content suggestions, swipe through the tiles in our Fire TV Sticks, or open the Amazon app on our phones to buy popcorn. Somehow, one way or the other, you’ll find Prime Video in your living room.
I don’t know about you, but I’m seeing Bezos more and more in my house.
All hail the king
But for how long?
It’s no secret that Netflix has established itself as one of the largest content producers in the new decade and should be treated as a major studio from now on. But not all of the content in the platform is a Netflix Original.
Netflix’s content provokes. Black Mirror is undefeated as a revolutionary and thought-provoking/societal-critic tv series. Titles like Narcos, House of Cards, and Orange Is the New Black made Netflix Originals a synonym of success. But by releasing Stranger Things, Mindhunter, and Dark, Marc Randolph’s newborn became the leading streaming service in the world by miles.
It touches outer topics and audiences that others haven’t reached yet.
And while NBCU still needs to prove itself in the original content war fields, it is hard to see Netflix-competing content for the next few months at least (looking at you, Disney). With all of the new platforms available, Netflix’s big fight is not for content. It is, though, for licensing.
So, could it stand straight without licensing contracts? Well, it could. But it’s not the time just yet.
While Netflix is the king of streaming services, the number of shows we enjoy in the platform makes us think of this looming licensing threat. Any first-year MBA student knows what I’m talking about. Michael Porter brought to life the concept of the threat of suppliers in 1996. It is yet to be reported by Netflix, but its executives have seen its trailer.
Four of Netflix’s most-watched shows in the past two years were Marvel’s original stories (such as Daredevil and The Punisher). While successful, they also brought the kind of provoking content back to Disney’s hands now that Marvel content will be exclusively on Disney+. Another reason for people to spend their time somewhere else.
Not to speak of more challenges, but I can think of one license that Netflix has had nightmares about losing: The Office. And where do you think that is heading? Your new feathered best friend: Peacock.
We all know the impact that Netflix had in our lives (and our couches): its film and tv series library is so engaging that sitting on our couches becomes much more appealing than spring cleaning. Although now, Netflix needs to create new content from scratch every time. Inevitably, the more on-demand platforms are out, the less licensed content Netflix will have available.
Running against the clock
Most households are now adopting the new norm of cableless TV and streaming services, while usually limiting themselves to three platforms. Besides, there’s not a lot of sense in paying for more than that. Even when people are endlessly looking for more content, we can only endure so much screen time.
Disney’s Mandalorian brings people back. Stranger Things does the same. While producing new movies and series, the next big thing will come from series renewals, not pilots.
Netflix’s content-owning strategy is no longer enough to beat newcomers. Whoever the winner of this streaming war, whether that be one of the brands mentioned above or others like HBO Max, Hulu, or SlingTV, all streaming services will have one goal only:
Bringing in fans over spectators.
Reality is, we now all expect the answer to one question: When does the next season come out?
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