Graphics by Nina Tagliabue
The BRB Bottomline: Netflix has been the leading power in online streaming services since 2007. However, since the launch of many other streaming services, Netflix has found itself in the middle of the streaming war. Apple launched Apple TV+, Disney launched Disney+, Comcast is getting ready to launch Peacock, and AT&T launched HBO Max. Smaller startups such as Quibi are also entering the race. The only important question that needs an answer now is: who will win?
Netflix stocks have been steadily rising since the company went public; today, the stocks are priced at $527.39. However, according to some analysts, this consistent growth is about to change due to the rapid influx in new streaming services such as Disney+, Apple TV+, and Peacock. For instance, when Apple TV+ was launched on November 1, 2019, Netflix stocks dipped 1% while Apple stocks rose 1.3%. Of the many streaming platforms in the market, Netflix is one of the most vulnerable to these so-called “streaming wars,” as the company depends only on streaming, while competitors like Apple and Disney have more diversified revenue streams and can thus afford to compete more aggressively. So far, though, the streaming wars haven’t significantly impacted Netflix’s stocks, as only a few small fluctuations were observed as the direct result of new market entrants.
Streaming Services for Students
Netflix remains the most popular streaming service among college students. There are even memes about “Netflix and Chill” that were created by students on account of how Netflix has become so prevalent in youth culture. However, most students don’t have their own accounts for Netflix as there are many more affordable subscribing options that include family packages. In this case, Netflix has an advantage of being the oldest streaming service in the market. Most American families have Netflix in their home, allowing the students to have their own accounts under the main family account. Therefore, college students don’t seem to be Netflix’s primary target customers. Instead it is their families that many streaming companies want to reach out to.
Another streaming service that is very popular among students is Amazon Prime Videos. Most schools give Amazon Prime students access to their students for free for three months. After that most students tend to stay in Amazon Prime. Amazon Prime Video comes with an Amazon Prime account, therefore most students tend to already have it without needing to do any additional work. There are many documentaries in Amazon Prime Video that could be used for teaching purposes, from teaching about China’s one child policy to teaching ancient Maya iconography. I can personally say that it saved me a lot of time and effort in my classes to have a variety of documentaries and other TV shows just one click away.
Watching TV or movies for a long time is not typically a trend among college students. Instead, they want to watch something quick while they are on the treadmill, cooking, or doing laundry. That’s when a new startup called Quibi comes into play. Quibi is a startup focussing on streaming services that are short and can be watched through a phone screen. The episodes on the app are up to 10 minutes long and can be watched from everywhere with a smartphone. Their motto is “Quick bites. Big stories.” Quibi’ is hoping to attract the younger generation who do everything through their phones. Together, we will see how successful it will be in a market led by the tech giants. However, for now Netflix and Amazon seem to be winning the race.
Some Streaming Services Strategies
Many analysts and executives believe that the streaming services in the U.S. has a saturation point and it might have already reached it. Fortunately, that is not a problem for Netflix, as the company continues to expand abroad. Six out of seven new Netflix subscribers are from out of the United States. As an international student, I believe this statistic to be true. Last year, Netflix started to aggressively advertise abroad. The company is bringing in a lot of “Netflix Originals” from different countries to attract foreign audiences. Since 2018, Netflix created two Turkish TV series alone to be streamed worldwide with subtitles. A potential drawback for Netflix could be the price in the market. Their most popular subscription costs $12.99 per month, while the company’s competitors are determined to lower the prices.
Amazon Prime Video
Amazon Prime Video is another core player in the streaming world. Amazon Prime Video also has its original TV shows, as well as the classics such as Full House, which was a sitcom very popular in the U.S. among those born in the 1990s. So far, Amazon Prime Video’s contents have been U.S. related. However, last year the company launched a documentary about a very well-known influencer’s life, Chiara Ferragni Unposted. The influencer is Italian, therefore the documentary is half in English and half in Italian. Most of the advertisement for the documentary was done through the influencer’s social media, which consists of many European, and especially Italian followers. This smart PR move helped Amazon Prime Video to expand in Europe, as it gave the opportunity for Europeans to experience the Amazon streaming service as catered to them for once.
Apple is the company who has the least at stake even if the streaming services project fails. Apple is known for having a solid following of 900 million customers, who would buy anything that has the iconic Apple logo on it. Apple TV+ comes as a complementing service with other Apple products. One disadvantage Apple has is a lack of content. Apple TV+ doesn’t have any of the classics or movies. It only includes original TV shows. The CEO, Tim Cook, and other executives don’t think this will be a problem, as they believe in quality over quantity. So far, Apple TV+ has nine original shows. Most of the advertising was done with “the Morning Show” starring Jennifer Aniston and Reese Witherspoon. In the current market, it seems that Apple TV+ cannot be a substitute for other streaming services. It has the lowest price of $4.99 among others, which indicates that people who have Apple TV+ will probably continue to have other streaming services for a variety of options.
Disney+ is one of the more recently launched streaming services. Disney+ offers many classics and more. There are new TV shows that are based on the older Disney movies and shows such as High School Musical: The Musical: The Series. As a child, I loved all the High School Musical movies. However, I am not sure if I would like to watch the new TV series, which creates an obstacle for Disney in catering to the interests of young adults and children. When a show is remade, it is after quite a long time, which means the kids who watched those movies and shows have since grown up. Also, in the High School Musical example, the cast is completely different. Therefore, Disney faces the challenge of bringing the old customers back just as much as attracting new ones. However, their biggest advantage is a lot of the timeless Disney classics are all collected in one place. Maybe the new shows won’t be as attractive to the older audiences, but Disney+ has demonstrated a huge potential. After launching at the last quarter of 2019, the company is expecting to break even in just 2024.
War or Not?
The executives of the companies mentioned above deny any kind of war between them. However, when Disney+’s launch was getting closer and closer, Disney owned channels stopped showing Netflix advertisements. The company also stopped streaming Disney movies on Netflix and prohibited the selling of new ones. Although there isn’t an explicit war, just like in all industries there is a war between competitors to make the most profit. There is also another war about which service is getting the most profitable classics. Recently Friends, the Star Wars Series, and The Office are leaving Netflix for others such as Disney+ and HBO Max. According to the Wall Street Journal survey, one third of the participants are planning on leaving Netflix in order to make room for new streaming services. Will Netflix be affected by these losses? We will have to see in a few months with the launch of Peacock and HBO Max.
In a world where streaming services are very popular, it is unreasonable to assume that consumers have reached their saturation point. All of these streaming services have their own original shows, and some even have the TV classics from the 2000s. When there are unlimited options to watch, consumers might feel overwhelmed, which will push them to make a decision between all of these streaming services. Then, the only thing that’s important will be the quality of the content and the user friendliness of the services.
Alara is a junior studying Mechanical Engineering and Business Administration. She is very passionate about financial literacy and joined BRB to discover more about this topic. She is also interested in brand management and marketing. This year, Alara is one of the senior columnists of the Financial Literacy column. She is an international student from Istanbul, Turkey and loves Turkish food. Alara also loves coffee, so when she doesn’t have a class you can probably find her in a coffee shop around campus with an iced americano!