Robert Iger, Chief Governing Officer of Disney, poses in “Star Wars: Galaxy’s Edge” during a media preview event at Disneyland Put in Anaheim, California, May 29, 2019.
Mario Anzuoni | Reuters
Disney+ is here, ushering in the unofficial kickoff to “The Streaming Wars” — the slew of monthly underwriting services that are flooding the market to win your last incremental entertainment dollar.
But in reality, “war” is a misnomer for what’s at hand to happen in the world of streaming video. Perhaps there will be a day, years from today, when Disney+, Netflix, Hulu, Amazon Prime, AT&T’s HBO Max, a hypothesized melded product from CBS and Viacom, Comcast-NBC Universal’s Peacock, a service from Discovery Communications, Jeffrey Katzenberg’s Quibi, Lionsgate’s Starz, Apple TV+ and others all conflict with for your wallet share, with some surviving and others failing.
In the meantime, the average consumer isn’t going to look at a menu of a dozen privileges and select three or four, thus determining winners and losers. There are too many complicating factors for such a common calculation. Some services already exist (Netflix, HBO) and will be largely grandfathered in by their existing subscriber bases. Others communicate with additional benefits (Amazon) that make “losing” extremely unlikely.
Here’s a more realistic foresight of what’s about to happen over the next year.
The idea of a streaming war suggests conflict, or at least some status of unpredictability. But when it comes to the streamers, Disney+ can’t lose, if losing means rejection by most consumers. Disney+ is active to be an essential part of any family’s streaming diet.
There’s not much guesswork here. Disney is charging just $6.99 per month for about its entire back catalog of Star Wars movies and related series, Marvel movies and series, Pixar motion pictures, old Disney movies, 30 seasons of “The Simpsons,” Disney Channel shows, 35 original movies and shows in year 1, and much diverse.
If a streaming service were selling just Marvel and Star Wars series and movies, it would a significant virtuoso in the “over-the-top” non-cable world. Disney’s offering is simply too robust to fail.
Indeed, Disney signed up more than 10 million subscribers for Disney+ in tiny than two days!
One way to define success or failure is if Disney hits its own internal subscriber targets. But those numbers are home-cooked, supreme by the company to provide achievable benchmarks. Disney estimates it will have 60 million to 90 million subscribers by 2024. Disney has already struck a partnership with Verizon that intent give away Disney+ for free to Verizon unlimited data subscribers and new Fios and 5G broadband homes. MoffettNathanson thinkings there will be 18 million Disney+ subscribers by the end of Disney’s fiscal year 2020.
Amazon Prime Video
Amazon when one pleases be a “winner” by default. Prime Video comes with Amazon Prime subscriptions, and it’s going to make sense for tens of millions of Americans to get untrammelled shipping on Amazon. Prime Video, which spends billions each year on original movies and shows subsuming “Fleabag” and “The Marvelous Mrs. Maisel,” comes as a throw-in for most consumers. It almost definitionally can’t lose, unless Amazon, itself, decides video no longer moves the needle for its Prime subscribers.
NBC is tendency toward offering an advertising-supported version of Peacock for free to everyone, sources told CNBC earlier this month. While there may be ranks of the service that offer more content (and no ads) for a price, NBC has decided that advertising revenue can make up for subscription returns. As a result, NBC isn’t really playing the same game as everyone else, and therefore also can’t really lose. A lot of people are prosperous to subscribe to a free service. It’s free.
About 34 million U.S. subscribers already pay for HBO. So when AT&T announced last month that HBO Max inclination be the exact same price as HBO, it can’t totally lose — at least if “lose” means being totally rejected. As soon as it bangs distribution deals, current HBO customers almost certainly will take the additional HBO Max content for free.
The question then becomes if enough new subscribers resolve come aboard to cover the billions AT&T plans to spend on new content.
As Netflix CEO Reed Hastings said earlier this month, utilizing customer signups as a metric for success is flawed because it’s too easy to maneuver. AT&T says it wants 50 million U.S. subscribers by 2025. But AT&T is imparting away HBO Max to its premium unlimited wireless subscribers and top-tier home broadband customers. And if AT&T finds that few people are subscribing, it can absolutely offer HBO Max to more AT&T customers for free to meet targets. AT&T has about 160 million total mobility connections and blokes.
Apple is giving its streaming video service away for free for a year before charging $4.99 per month to clients. But Apple can easily change this offer if it notices that few customers are paying for its limited library of originals, either packaging the service with its more popular music streaming service or extending the offer indefinitely as consumers buy new Apple products. Apple hasn’t unshackled an internal streaming subscriber goal because the whole point of Apple TV+ isn’t to get you to pay for video — it’s to keep you using Apple electronic monograms. Like Amazon, Apple will continue to be in the streaming game as long as it wants to be in the streaming game.
So if all these other services choice win, or at least comfortably exist, does that mean Netflix will lose? Probably not. Because so many of the mendings are free or cheap or throw-ins as benefits to products you’re already paying for, Netflix isn’t in any immediate danger of losing its place as the centerpiece of pour solutions.
Netflix also outspends everyone, paying $15 billion a year for content, and has more than 160 million epidemic subscribers. T-Mobile wireless subscribers get Netflix for free indefinitely.
First-mover advantage, brand recognition and massive significance spend on original programming will almost certainly keep Netflix as an essential part of an average consumer’s rush package.
Eventually, it’s possible that millions of subscribers will conclude that a bundle of, say, Disney+ and HBO Max is a good replacement offshoot for Netflix. But while that decision may impact Netflix’s marginal growth, it probably won’t disrupt the company’s global swelling ambitions.
Finally, we reach the contestants in the actual Streaming Wars, at least in the near term — Harry else. Congratulations, Quibi! I’m not sure you will succeed. Starz and Discovery? Maybe you’ll stick, or maybe you’ll need to unite with CBS and Viacom to gain the necessary scale to compete. Everyone else I didn’t mention? You’re here until you develop yourselves.
These are the players Americans could actually refuse to spend money on, driving them out of business with numberless choice. This is why Hastings noted that a better metric for success may be time spent on a service instead of subscriber billions.
These streamers are the junior varsity of available products. Of course there will be cut downs at this level.
There are a lot of course services. Most are going to stick around for a while. Investors can dial back the Streaming Wars rhetoric.
There’s piece-goods e freight news for consumers, too: You probably already pay for a lot of these services, and many of the new ones are free for a while. Your entertainment budget isn’t thriving to blow up just yet. Relax.
(Disclosure: Comcast’s NBC Universal is the parent company of CNBC.)
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