With the streaming wars in full swing, Netflix announced its earnings last week and the big news coming out of it was their miss of target subscriber growth by nearly half. While it isn\u2019t all doom and gloom for the current streaming leader, this surprising quarter shows that we have officially moved to the next phase in OTT – and in addition to the stalled user growth they are facing now, Netflix will also have significantly more competition. This opens Netflix to questions about new business models that could help them stay on top.\u00a0<\/p>\n
To fully grasp the state of this streaming war, we have to first take a look at the new services on the horizon. In the next year, we will have the launch of Apple+, Disney+, HBO Max, the offering of NBC Universal and more. These are big players with amazing franchises like Marvel, Star Wars and Game of Thrones and they are not just relying on existing content. They are also spending billions of dollars to add new content to their portfolio, teaming with names like Oprah, Steven Spielberg and JJ Abrams. And… to reiterate, these services have yet to launch, so the slow growth Netflix is already facing is problematic.<\/p>\n
Additionally, when this competition does come, not only will Netflix have new competition around original content, but these competitors are pulling some of Netflix\u2019s top shows like The Office as well, creating a \u201cdouble hit\u201d of sorts for them. <\/span>Neilsen reported this week that the Office was streamed on Netflix for 52 billion minutes in 2018, so it should be seen as no surprise that Netflix offered up $90 million to keep it.\u00a0<\/p>\n So what are the positives for Netflix? To start, it is still early in the streaming wars and Netflix has developed a unique content offering that stands out from the competition. They have tentpole, \u201ccan\u2019t miss\u201d shows like Stranger Things, where the new season has already brought in more than 40 million viewers. Every time one of these tentpoles is released, Netflix will see a lift. Additionally – in the times of the year where there are no tentpoles, Netflix has amassed a massive amount of other content, however not all were successful. Netflix launched more than 700 original shows\/movies last year, and while not all of them were at the level of Stranger Things, nor did they amass the same number in audience, it does reduce the churn and stem the tide until the next tentpole comes. However, they will need to keep a close eye on the popularity of these smaller shows so they don\u2019t continue losing their audience.\u00a0<\/p>\n That said, even with these strengths, the rise in competition highlights the need to explore new business models to stay ahead of the game. As an example, Netflix announced they were officially moving forward with a mobile-only plan in India, where the monthly rate is cheaper than normal, but content will only be available to watch on a phone. Our <\/span>2019 Consumer OTT Report <\/a>found that streamers spend 2+ hours\/day watching some form of mobile video content and millennials and parents in particular watch 20% more mobile OTT content than average, so this seems like it could have legs – especially in emerging mobile first markets like India.\u00a0<\/p>\n The willingness to explore models like a \u201cmobile-only\u201d option, also raises the question on if they will take this even further, and introduce an ad supported model as a way to get prices down. Netflix addressed this during earnings, and said that they don\u2019t see themselves moving into advertising, but you have to wonder if that can last forever. Our study found that the majority of consumers would actually prefer ads if it meant a free or cheaper product, and companies like Hulu are driving 70% of their revenue from advertising. The question is if Netflix will see the value as well.\u00a0<\/p>\n So what\u2019s next? We still have a long way to go and there will likely not be one clear winner. Most streamers use an average of three different services at any given time, and the entire OTT market is expanding so rapidly, that there is room for multiple services.\u00a0 \\<\/p>\n As more competitors move into ad supported model options however, we will just have to wait and see if Netflix joins them.<\/p>\n <\/p>\n","protected":false},"excerpt":{"rendered":" With the streaming wars in full swing, Netflix announced its earnings last week and the big news coming out of it was their miss of target subscriber growth by nearly half. While it isn\u2019t all doom and gloom for the current streaming leader, this surprising quarter shows that we have officially moved to the next […]<\/p>\n","protected":false},"author":32,"featured_media":62723,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[138],"tags":[],"acf":[],"_links":{"self":[{"href":"https:\/\/blog.openx.com\/wp-json\/wp\/v2\/posts\/62720"}],"collection":[{"href":"https:\/\/blog.openx.com\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/blog.openx.com\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/blog.openx.com\/wp-json\/wp\/v2\/users\/32"}],"replies":[{"embeddable":true,"href":"https:\/\/blog.openx.com\/wp-json\/wp\/v2\/comments?post=62720"}],"version-history":[{"count":1,"href":"https:\/\/blog.openx.com\/wp-json\/wp\/v2\/posts\/62720\/revisions"}],"predecessor-version":[{"id":64278,"href":"https:\/\/blog.openx.com\/wp-json\/wp\/v2\/posts\/62720\/revisions\/64278"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/blog.openx.com\/wp-json\/wp\/v2\/media\/62723"}],"wp:attachment":[{"href":"https:\/\/blog.openx.com\/wp-json\/wp\/v2\/media?parent=62720"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/blog.openx.com\/wp-json\/wp\/v2\/categories?post=62720"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/blog.openx.com\/wp-json\/wp\/v2\/tags?post=62720"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}