The good, the bad and the improbable: Which streaming service will succeed?
- 07 August 2019
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An Ofcom report has found that 47% of UK households are now signed up to a streaming service, up from 39% in 2018. From old favourite Netflix to the futuristic Apple TV+, we take a look at which services are most likely to succeed
Founded in 1997, Netflix is the giant of the streaming world, creating content that has captured attention the world over. As of April 2019, Netflix had over 148 million paid subscriptions worldwide, rising to over 154 million subscriptions including free trials.
Even back in 2016, Netflix released an estimated 126 original series and films in 2016, more than any other network or channel. These Netflix originals have included cultural phenomenon Stranger Things, alongside ground-breaking shows such as When They See Us, and the critically-acclaimed Our Planet, narrated by Sir David Attenborough.
It is this content that seems to set Netflix apart from its competitors – but it might also be its downfall, due to the huge budgetary demands. Netflix are expected to spend no less than $15bn on content this year, with no signs of slowing. The brand is cash flow negative and this shows no sign of changing until at least 2022.
Presumably to combat this, Netflix introduced a price increase in May 2019 for UK users, keeping its most basic level at £5.99 but increasing premium levels – where you can stream on between two and four devices – by £1 and £2 respectively, with the most expensive price bracket now at £12.99 – double Britbox’s offering.
Netflix is certainly the giant of the streaming medium, but it will have to answer big questions if it wants to move from arch disruptor to international treasure, as the BBC represents.
Back in March 2019, the BBC and ITV announced a partnership to launch Britbox, a flagship British streaming service, back into their home market, following success in North America, where it has gained over 650,000 since its launch in 2017. This is expected to grow into the low millions once it is rolled out elsewhere, according to former BBC executive Ashley Highfield.
Details have this month been announced as to the content offering and pricing of this new service, with a subscription costing £5.99 per month in HD, covering multiple screens and devices. The platform will launch between October and the end of December. It is also important to note that the BBC and ITV attempted to launch this service over a decade ago, but were at the time blocked by regulators.
The challenge will likely come in unifying BritBox, ITV Hub (which currently offers its own subscription service, ITV Hub+) and BBC iPlayer. Certainly, many ITV and BBC programmes will move on to BritBox after they have been broadcast on TV and expired from the relevant catch-up services. Compared to Netflix’s estimated marketing budget of $1bn, will the BBC and ITV be able to build enough brand awareness to compete?
Arguably, however, competing is not their first priority. But does BritBox’s self-professed position as ‘complementary to Netflix’ fit within the current streaming landscape? Its USP is clearly homegrown British shows – but Netflix seems to have already tapped into this need with shows such as The Crown. However, Britbox believes it has identified a need, with research by Differentology finding 44% of the UK claiming they are likely to subscribe to a new SVOD service which features British content.
Nonetheless, the broadcasters will be enlisting a roster of programmes to entice subscribers, including Love Island, Gavin & Stacey, Broadchurch and The Office, with original British content expected to follow next year. It’s the original content that will need to appeal to its home market; this is a whole different proposition from its success in North America, where there has always been a clamour for Britain’s unique televisual offerings, from Monty Python to Top Gear.
Earlier this year, we reported that Apple was taking a bite at Netflix by launching its own video subscription service, Apple TV+. There’s much yet to be announced about this fledgling service, including the price, but one message Apple was keen to share was its A-list line up, including Steven Spielberg, Jennifer Aniston, Steve Carrell and Oprah Winfrey, to produce and star in exclusive original content. Spielberg, in particular, is critical of Netflix, and is a big name for the new medium.
Back in April, CIM’s marketing director Gemma Butler commented, “There’s a lot we still don’t know about Apple’s streaming plan – especially around prices – but, if the quality of content matches the quality of its announcement event, Netflix might just be looking at its first credible competitor.”
Another crucial Apple offering is the revamped Apple TV app, which is rumoured to be a hub for streaming services, offering content from over 150 existing apps, including Amazon Prime and Hulu, with speculation of bespoke bundle packages at discounted price. With consumers increasingly feeling the pinch of mounting subscription services cost, could this new position as a curator of content help Apple to establish their competitive edge in this market? With many details yet to be released, watch this space.
Amazon Prime Video
Perhaps a less competitive offer is Amazon Prime Video, which launched in its first form over 10 years ago. Tied into the Amazon Prime subscription service, Amazon Prime Video has in recent years amped up its activities with a raft of original content, which arguably started with The Man in the High Castle back in 2015. Since then, Amazon Originals have included the recently launched Good Omens, starring David Tennant and Michael Sheen, and The Grand Tour, as well as the live and exclusive 2019/20 Premier League football games.
Amazon are tight-lipped on Prime membership numbers, but in 2016 it was estimated that there are about 1.6 million UK households using to Amazon Prime. By default, these users are automatically signed up to Prime Video, as well as Prime Music and Prime Reading. However, it is unclear at present how many subscribers regularly utilise Amazon’s full offering. Despite this, in the UK, US, Germany, Sweden, and Austria, access to Prime Video is also available through a video-only membership, which does not require a full Prime subscription and is priced at £7.99 a month.
As Prime Video continues to build partnerships with major media players such as Virgin Media, announced this month, they are establishing themselves as a key player in the streaming service space, albeit faced with stiff competition.
And the latest in the long list of streaming services recently announced, Disney+. With a whole host of Disney’s existing content, including Star Wars, the Marvel Cinematic Universe, Pixar movies, National Geographic documentaries and more, Disney also has its sights set on original content. The stand-out piece, it seems, is The Mandalorian, a Star Wars spin-off. Produced by Jon Favreau, the man behind the reboot of The Lion King and The Jungle Book, the series topped $15 million per episode and already has a second series in the works. This seems to be the firm direction of Disney+, with much of its original series and films focusing on their existing franchises. Indeed, it has been confirmed that there will be over 7,500 episodes and 500 films in the first year that Disney+ is live.
Cinematically, Disney is having a banner year, breaking all time box office records thanks to Avengers: Endgame and following it up with billion dollar grossers such as Aladdin, The Lion King and Toy Story 4; sequels to Frozen, Maleficent and a new Star Wars are next to come.
The new service – and its heavily loaded schedule – is set to launch in the UK in early 2020, following a US launch on 12 November 2019. It's currently unclear what will become of their existing UK subscription service, DisneyLife, which is priced at £4.99 and offers access to over 450 Disney films. However, what has been revealed is that Disney+ will be similarly priced to DisneyLife, at just $6.99 a month in the US when it launches in November, which is likely to be replicated at £6.99 in the UK. The service is set to launch in every major region within just two years.
This launch poses problems for the other major streaming services, too, as brands look to consolidate their content. Disney has already begun withholding rights from Netflix, which has for last three years been a go-to for fans to watch the latest releases.
The market is being flooded with big names, as viewing habits continue to sway towards streaming services. Indeed, Ofcom's report found that two in five of UK adults now consider online video services to be their main way of watching TV and film. Each of these content offerings have the capacity to succeed, but we do not yet have the information to know which one, if any, will dominate. Certainly, Netflix is the best established, Britbox is the most suspect and Disney could be the dark horse; but the technology powering Apple’s ecosystem could be a pivotal difference, and it is never wise to rule Amazon out.
However, the history of streaming has taught us not to assume anything. Once upon a time Blockbuster was the premier source of rental entertainment, and they famously turned down an approach from Netflix, before going bust not too long after. In the race for subscribers, big business cannot afford to make mistakes.
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