Everything that cannot go on forever will stop. Netflix has enjoyed an almost perfect rise out of Blockbuster’s shadow into an elite company, blowing by entertainment and technology rivals in the process. Its market cap, at its highest, reached $180B and it’s impact has expanded across the globe. But now rivals are amassing at its gates, ready to take a giant chunk their money and subscribers jumping into the fray with competitive offerings.
The question for Netflix is if it has what it takes to navigate this rocky terrain and maintain its position atop the streaming mountaintop. I think they’re doomed because creatively they have hit a wall and the competition has the wherewithal to bring them down.
Let’s start with the streaming war landscape. Netflix was the biggest and baddest of the streaming services. It was first, it was the best, and they didn’t mind paying millions in licensing fees to attract and retain customers with the shows and movies they loved.
As those millions turned to billions however, Netflix started making original content to remove some of the leverage big studios had in licensing negotiations. Now some of those companies are taking their ball, going home, and building their own versions of Netflix—opting to simply beat Netflix at its own game.
First up is Disney, the king of IP who is about to launch Disney Plus at nearly half the price of a Netflix subscription. Disney will have original shows ready to go at launch, plus that back catalog of Star Wars, Pixar, and Marvel movies and shows are second too none.
Oh, did I mention they bought Fox? So the Simpsons and the rest of FX’s slate of great TV—Fargo, Atlanta, Archer, Always Sunny in Philadelphia to name a few—are all going to Mickey. Disney is now the owner of Hulu too, to go along with ESPN and National Geographic as well. This company is perhaps best positioned to take down Netflix.
Next we have the Godfather of prestige TV, HBO. While Netflix called them out and may have forced the network to offer a standalone option, HBO still offers a lot of great shows and access to movies that are as good as its peers, even if the volume is small at the moment.
Quality should always trump quantity and I appreciate HBO for realizing that with many of its productions—but my GOD did they screw up the last two seasons of Game of Thrones.
Quantity is coming though, as parent company AT&T wants to beef up its content library too and do what Netflix has done (with some success): create a ton of shows and hope something sticks. We’ll learn more about HBO Max later this month, but the team from Time Warner should not be slept on in the war to come.
And then we have the Big 4: Amazon, Apple, Google, and Facebook. First, there’s Amazon, one of three companies in America that is worth a trillion dollars and thus able to get into a pissing contest with Netflix for original content.
Prime Video may have started out as just another method to beef up Amazon Prime, but quickly grew into a true HBO rival putting out compelling shows such as Catastrophe, Fleabag, Man in the High Castle, and the Marvelous Mrs. Maisel.
It even won an Oscar for Manchester by the Sea. I also love their willingness to go where Netflix has refused thus far: live-streaming sporting events. Prime has a deal with the NFL and its only a matter of time before one of the international soccer leagues—my money is on La Liga—makes a deal to stream games there too.
Amazon also made a major bet on video game streaming when they bought Twitch. The platform has become the go to place for many of the top streaming e-sports athletes and leagues. Amazon, more than any of the other tech titans, has positioned itself as a destination for online video entertainment.
You cannot sleep on Apple though, who is coming out with TV Plus at a super cheap $4.99. The services will debut with a small slate of shows that may or may not be good—we just don’t know yet.
They are budgeting $6 billion to spend on content to get a foot in the race and to be quite honest, the company is sitting on so much money that it wouldn’t surprise me to see them double that in the next calendar year.
Besides, Apple has plateaued creatively as the smartphone market has matured. They need to ramp up their services to trap customers into their ecosystem forever, and TV Plus will help them accomplish that. I’d bet money on Apple finding its footing in the brave new streaming world.
Apple’s smartphone rival (and customer) Google still owns YouTube, a streaming king of its own right with an army of content creators using their platform to entertain us for “free”. They have dabbled in some original content, but I would be surprised if Google doesn’t take its foot off of the gas pedal and simply maintain a platform for everyone. There is great potential for live-streaming events and Google has a ton of cash if it ever wants double down on some of its scripted programming bets. But for now, they are happy.
I could mention Facebook here but its become such anathema to my generation that I just don’t think its worth mentioning. Facebook Watch has a couple of reality TV series like Tom versus Time and Red Table Talk, but it doesn’t look like it’ll get bigger than that. Best of luck though Zucks!
Finally, Netflix’s biggest concern might be video games. Netflix sees the likes of Fortnite and Apex Legends as serious threats as they too are vying for your attention.
Video games are a multi-billion dollar business that require more focus than television shows or movies. Most people who pay $60 for Red Dead Redemption 2 or NBA 2K aren’t bothering to catch up on Money Heist or checking in for the newest episodes of Big Mouth.
So Netflix is about to be attacked on all fronts. There are rival streaming services and competitors for attention coming for their customers. At that these competitors are using compelling content, lower prices, and ease of use to snatch the rug right out from Netflix’s feet. But Netflix has a big joker – data.
Netflix should still be able to come out on top because it has collected so much data on what many of us watch over the years that it knows what to create and what to put in front of you to watch. Surely, the almighty algorithm should protect it from external threats.
The big question is, what’s going to protect Netflix from a creative/curatorial lull? What happens when the algorithm no longer recommends shows you and I want to watch? This battle royale should be very entertaining to say the least.