Berke Yazicioglu

Netflix is under siege. Two decades after the media company was founded – and almost ten years since it moved into streaming – its competitors have woken up. It’s now clear that TV streamed across the internet is winning the battle against conventional broadcasting: in the UK, more people have paid for Netflix, Amazon or Now TV than traditional pay TV services since July 2018, and 61 per cent of 18- to 29-year-olds in the US primarily consume television through streaming.

For now at least, Netflix remains the streaming king – and its position won't be seriously challenged for most of the next decade. The firm has built up a critical mass of 150 million subscribers, streams in almost every country in the world, and since 2012 has been making its own programming under the Netflix Originals banner. In 2013, Ted Sarandos, Netflix's chief content officer, said the company was racing against HBO to create the future of television. “The goal is to become HBO faster than HBO can become us,” Sarandos said. Netflix arguably achieved this in 2018, when it earned more Emmy nominations than HBO for the first time, while in the same year Now – HBO's over-the-top streaming service – languished at five million subscribers.


But the pressure is intensifying. The launch of new international streaming services Apple TV+ and Disney+ in November 2019 will put pressure on Netflix's dominance, while WarnerMedia, the owner of HBO and Warner Brothers, and NBCUniversal are set to launch proprietary streaming services in the coming months. These new rivals will join original programming efforts from Amazon Prime and YouTube, plus traditional broadcasters, in trying to topple Netflix.

The US market is the most congested, but the picture is repeated around the world. Different countries have their own localised streaming services, which mostly play second string to Netflix but still take up some share of the market. In the UK, Sky's Now TV and the upcoming Britbox, a joint BBC and ITV venture, are its biggest paid subscription competitors, while in India, Walmart-owned Flipkart launched its own streaming service in August 2020.

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Once Netflix's competitors have launched their services, the tedious work of growing customer numbers begins. It's a process that won't see quick results, even for those with the deep pockets of Disney and Apple. "There's absolutely no way that Disney will overnight become as big as either Netflix or Amazon – it's going to take Disney well into the 2020s," says Tony Gunnarsson, a principal analyst specialising in pay TV and over-the-top video at telecoms and media analyst Ovum. In the US, Netflix took around a decade to reach its current level of 65 million subscribers.

For rivals, the main challenge is that Netflix simply has the most complete offering. The platform is technologically capable, and the company has enough experience creating its own shows and films to align itself with the entertainment industry’s big-hitters. (Although it is still waiting for its first best picture win at the Oscars, it got its first nomination, for Alfonso Cuarón’s Roma, in 2019).


65 of the best Netflix series to binge watch right now Netflix 65 of the best Netflix series to binge watch right now

Disney certainly has the production power to attract subscribers. Three of the top five highest-grossing films in 2018 belonged to the company, mostly thanks to its Marvel franchise. It’s set to repeat box office dominance in 2019, with Avengers: Endgame, The Lion King, Captain Marvel and Toy Story 4 sitting at the top of the charts. People will join its service just to watch Star Wars – Disney has commissioned new Star Wars series The Mandalorian specifically for Disney+ – while Netflix has struggled to create any successful franchises through its own Original films (although it has had more success creating Original series, such as Stranger Things and Orange Is the New Black).

Where Disney falls down, however, is that its streaming capabilities are yet to be tested at scale. It has run the children-focused Disney Life streaming service in the UK since 2016, and has developed sports streaming through ESPN+ in the US, but neither of these serve tens of millions of people simultaneously. It has yet to prove it has the technical capability to create a system that’s easy to navigate, user-friendly and able to keep people watching.

Apple has the opposite problem. With more than a billion iPhones and iPads in circulation, it has a simple way to put its TV offering in front of people's eyeballs – one update to iOS and a new streaming icon can appear on devices around the world. Where it lacks experience is in content. The roster of stars it has signed up for Apple TV+ – who include Steven Spielberg, Reese Witherspoon, Jennifer Aniston and Oprah Winfrey – shows the depth of its pockets. But the company is known for being family friendly and risk averse, which perhaps explains why it has so far failed to announce any shows that really surprise or delight. In September 2018, the Wall Street Journal reported that Apple CEO Tim Cook had objected to Vital Signs, a drama about hip hop star Dr Dre which featured cocaine use and an "extended orgy" scene.


But the biggest impact of the new streaming services may not be in what they offer, but what they take away from Netflix, particularly when it comes to content. "The greater impact of Disney's launch will be that all Disney content will be off Netflix," says Michael Pachter, a managing director at analysts Wedbush Securities, who has frequently predicted Netflix stock is due to decline in value. By the end of 2020, he predicts, all Disney's content will be off Netflix. The result? Netflix’s reputation may be dented if consumers looking for shows on the platform notice a drop in blockbusters. "I'm not sure subscribers are going to know that the content is on Disney’s standalone service – they are going to notice is not on Netflix," Pachter says.

Other rivals are already in the process of pulling their shows: Friends and The Office are set to vanish from Netflix’s library in 2020 – Friends to WarnerMedia's own streaming service, and The Office available only on NBC's upcoming platform. This should trouble Netflix: in a poll by The Hollywood Reporter, 49 per cent of Netflix subscribers aged 18-29 in the US said they would cancel their accounts if those two shows and Disney content were pulled.

But for now Netflix has one final trump card. As it has established itself as a cultural phenomenon, it has gained a significant first-mover advantage in terms of brand recognition, becoming the first place users often look for new shows. Want to see whether something is streaming? A Google search usually includes the word "Netflix". "They've branded it where they are the repository of all television ever made," Pachter says. "So we will type in 'I Love Lucy Netflix’, which isn't there, but we'll just assume maybe it is."

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