Imagine if Netflix got “Blockbuster’d.”
As much of a cultural impact the streaming service has had since its expansion in 2011, seemingly reshaping how the world consumes TV shows and movies, picture the world’s largest on-demand site becoming the equivalent of a 90s pop culture reference.
I admit, the thought is almost laughable.
But the recent announcement of future media streaming services ahead, with Disney, AT&T’s WarnerMedia and NBCUniversal’s streaming services set for release in the next two years, it will be the first time Netflix is pitted against formidable competition in a historically one-sided race.
Still, considering Netflix’s dominance, it’s way too early to say the online entertainment service could be reduced to a Hollywood footnote. The brand has vastly grown since its humble beginnings as a DVD sales and rental company in 1997, having outperformed other streaming services by an unobtainable margin.
For nearly 10 years, Netflix founders Reed Hastings and Marc Randolph have sat atop the entertainment world, as the company has become the go-to medium for shows and movies — new and old. Netflix now boasts 150 million paid subscribers, by far the largest among the industry’s media streaming services. And by 2020, it’s expected to tally over 200 million subscribers.
Apps like Hulu, HBO Now and Amazon Prime haven’t been able to fend against Netflix’s extensive catalogue of classic films and original, self-produced content. But with upcoming platforms like Disney’s Disney Plus, WarnerMedia’s HBO Max and NBCUniversal’s unnamed streaming service all set for release by 2021, Netflix’s reign could be quickly shortened.
Now, let’s not get out of hand, Netflix won’t go out like Blockbuster. The odds of the company going bankrupt, squandering its 150 million-plus subscription base and cultural following is, and I say this confidently, pretty unrealistic.
Though, the establishment of Disney Plus, HBO Max and NBCUniversal’s streaming platform could drastically sever the revenue numbers Netflix has had over second-tier streaming sites. These companies are the only ones with enough cache to contend against Netflix, which obtained much of its content from the three companies to gain its popularity.
These long-standing brands, in many ways, are looking to disfigure everything Netflix has built to fairly compete against its decade-long success. Some companies have already began the process of directly swiping at the entertainment site’s feet.
First step: Networks need to regain the shows they handed to Netflix.
Disney and NBCUniversal have began to reclaim the movies and shows they licensed to Netflix, as they intend on placing them exclusively on their own streaming sites.
In June, NBCUniversal took back shows “The Office” and “Friends,” two of Netflix’s most viewed offerings. And Marvel is slowly gaining its properties to head its streaming app, which will already have material from some of the industry’s biggest draws in TV and film — Marvel, Pixar, Star Wars and National Geographic.
Second step: Firmly undercut Netflix’s subscription base by charging consumers less.
According to CNET, Disney Plus will cost $7 a month or $70 a year upon its fall release date. The price is half the cost of HBO Now and a significant cut from Netflix’s subscription rate. And unlike other streaming services, sources at inverse.com suggest NBCUniversal’s platform will be advertisement-based. Rather than charge for monthly or annual use, it will be free to viewers who still have access to basic television.
With this move, Netflix’s subscription base could falter because of the company’s price points, which it used in its efforts to replace cable networks. The nearly $107 monthly payment for standard cable proved to be embarrassingly overpriced compared to Netflix’s $10.99 monthly fee. Now, Disney, NBCUniversal and WarnerMedia are using the company’s own formula and turning it on itself.
How well it fares is to be determined. Other streaming services have attempted to duplicate Netflix’s blueprint, too. And with that, services like Amazon Prime, HBO Now and Hulu have established worthy followings, but they’ve never reached Netflix’s apex.
According to CNBC, 89% of the people that subscribe to a media streaming service have a Netflix account. Platforms like Amazon and Hulu make up 46% and 28% respectively. But again, Disney, WarnerMedia and NBCUniversal are really the only production companies that can compete with Netflix.
The most likely to dethrone the 22-year-old company is Disney. In the last five-to-10 years, it seems like the company has worked to acquire 90% of Hollywood’s biggest properties, making it even easier for the entertainment conglomerate to hit the billion-dollar mark.
In fact, in 2018, Disney’s long list of feature-length projects pulled in a ridiculous 7 billion dollars in international box office revenue, by far the most of any other entertainment company. It was the second time its ever happened, the first being in 2016 by the studio.
And so far this year, according to The Hollywood Reporter, Disney has already accounted for 46% of the 15.9 million dollars collected among films released on 1,000-plus screens, thanks in part to “Avengers: Endgame” becoming the highest grossing film of all time — not adjusted for inflation.
If any company could transfer this same success to an on-demand streaming app, it’s The Walt Disney Company.
NBCUniversal and WarnerMedia are certainly nothing to scoff at either. The two companies are top billers in Hollywood, with them each generating billions of dollars annually from their properties. Though neither have the same reach as Disney, Comcast’s NBCUniversal oversees content from one of the three largest TV networks in the world and Universal Studios. And WarnerMedia, formerly Time Warner, operates big-name brands like Warner Bros. Studios, HBO and Warner Communications. So, really, all three companies have a chance to surpass Netflix.
Possibly the biggest barrier standing in Disney, WarnerMedia and NBCUniversal’s way is Netflix’s consumer loyalty.
Netflix is a proven commodity in the entertainment industry, having grown from being recognized as a service overly saturated with C-list films to producing Oscar and Emmy award-winning projects. Probably the company’s biggest accomplishment is having reshaped the way audiences consume TV shows and movies. The company’s methods have reduced cable viewership and made analysts question the longevity of movie theaters. That fact isn’t as quantifiable as Netflix’s six Oscar wins, true, but it signifies something bigger: Hollywood’s refinement.
Netflix’s success has resulted in their audience’s brand loyalty. According to a report at Access Development, the company is among the top five brands with increased consumer allegiance — second behind Airbnb.
Even if viewers jump ship to Disney Plus, HBO Max or NBCUniversal’s service, it’s unlikely they’ll completely stop their use of Netflix or any other streaming app. According to research done by company Vindicia from nScreenMedia, the average American subscriber watches 3.4 on-demand streaming services.
Though, that doesn’t mean there haven’t been kinks in Netflix’s seemingly impenetrable armor as of late. According to CNBC, Hulu gained twice as many domestic subscribers as Netflix based on the company’s first quarter numbers — 3.8 million compared to 1.4 million.
Even still, Netflix remains the much larger company, having twice as many U.S. subscribers total (60 million) than Hulu (28 million), the insertion of additional streaming services could narrow the revenue gap even further. Hulu was clearly the third largest streaming service behind Amazon, and now, the app is fully controlled by Disney. Another win for a platform that’s not set for release until November.
Only time will tell whether Netflix will remain an industry titan. But with the fight between the entertainment service and new platforms to come, the real winners will be the viewers. There’s more than enough money to ration out among the heap of media streaming services in the multi-billion dollar industry. There’s even more space for expansion, as there’s no bounds among online platforms.
So, in the end, whatever company comes out on top doesn’t really matter. The world of entertainment will prove to be better because of it.