Netflix’s competitors are on the rise, but Reed Hastings says there is no real change in the competitive environment.
Netflix secured 23% of new Video on Demand subscriptions in the 3 months until October 2019, closely followed by Hulu with 20% share, 56% of new VoD subscriptions were ‘stacked’ 2nd or 3rd subscriptions, 30% were 1st time subscribers – of whom 31% chose Netflix as their first streaming experience. Netflix is tied in first place with HBO Now for customer advocacy.
Among the subscription streaming services for the first three months of the year found Netflix running sixth, with Paramount+ and Discovery+ making their first appearance in the data in the most recent quarter. (data provided by – Kantar Group)
Commenting on the underwhelming subscriber figures, co-CEO Reed Hastings rejected the notion that new market entrants for subscriber dollars was a factor that could be driving the decline. “There’s no real change that we can detect in the competitive environment,” he said, citing linear TV and YouTube as Netflix’s bigger concerns.
Talking about competition, YouTube TV, Google’s live TV streaming service offers more than 70 cable and broadcast networks for a monthly fee. Programming includes live sports, news and the most popular TV shows. That’s something Netflix can’t match, and live sports channels are important if you’re aiming at replacing traditional TV. YouTube TV is available in the United States and in a few cities in North America.
If we take a look at other streaming services, we can see that Prime Video is Netflix’s main competitor, but there are other upcoming streaming services as well. Amazon Prime is available to all Amazon users, and generates annual revenues of $14.1 billion. With 150 million subscribers in 200 territories worldwide, Hulu is next up, it has 30.7 million users and eight offices in the US and China, the company’s annual revenue is $1.5 billion.
The Walt Disney Company’s streaming service Disney+ is the direct-to-consumer subscription service, which has 28.6 million users, and its second quarter revenue was $18 billion. HBO alone employs nearly 2,000 people and generates annual revenues of $1.7 billion. The company expects to reach $5 billion in annual revenues and attract 50 million subscribers in the USA.
Apple just launched Apple TV+ in November 2019, which already surpassed 33 million subscribers in the United States, but its income is not yet known.
Of course there is no real competition for Netflix yet, but Hastings has to consider that all these new challengers in aggregate could take its toll on Netflix. Considering the growth potential these upcoming streaming services have, they can cause a headache for Netflix in the future.