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Netflix

Streaming TV users to face tough choices in 2019 as Netflix, Amazon and Hulu face more competition

  • With Disney and WarnerMedia launching new services, the streaming market is changing
  • Viewers will have to decide between losing access to some content or paying more
PUBLISHED : Wednesday, 09 January, 2019, 10:04pm
UPDATED : Thursday, 10 January, 2019, 4:50am

Streaming TV may never again be as simple, or as affordable, as it is now.

Disney and WarnerMedia are each launching streaming services this year in challenges to Netflix’s dominance. Netflix viewers will no longer be able to watch hit films like Black Panther or Moana, which will soon live on Disney’s subscription service.

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WarnerMedia, a unit of AT&T, will also soon have its own service to showcase its library of blockbuster films and HBO series.

Families will have to decide between paying more each month or losing access to some of their favourite dramas, comedies, musicals and action flicks.

“There’s definitely a lot of change coming,” says Paul Verna at eMarketer, a digital research company. “People will have more choices of what to stream, but at the same time the market is already fragmented and intimidating and it is only going to get more so.”

Media companies are seeking to capitalise on the popularity and profitability of streaming. But by fragmenting the market, they’re also narrowing the once wide selection that fuelled the rise of internet-based video. About 55 per cent of US households now subscribe to paid streaming video services, up from 10 per cent in 2009, according to research firm Deloitte.

Just as Netflix, Hulu and Amazon Prime tempted viewers to “cut the cord” by cancelling traditional cable TV packages, the newer services are looking to dismember those more inclusive options.

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Disney Plus is set to launch late this year with new Marvel and Star Wars programming, along with its library of animated and live-action films and shows. It has not announced pricing yet, but Disney chief executive Bob Iger said in August that it is likely to be cheaper than Netflix, which costs US$8 to US$14 a month, since its library will be smaller.

AT&T plans a three-tier offering from WarnerMedia, with a slate of new and library content centred around the existing HBO streaming app. There is no word on pricing yet.

Netflix and others have invested heavily in original films and TV shows to keep their customers loyal. Netflix, for instance, recently said that 45 million subscriber accounts worldwide watched the Sandra Bullock thriller Bird Box during its first seven days on the service, the biggest first-week success of any film made for the company’s nearly 12-year-old streaming service.

That first-week audience means nearly a third of Netflix’s 137 million subscribers watched the film from December 21 through 27 – a holiday season stretch when many people aren’t working and have more free time.

But Netflix, Hulu and others may soon have to do without programmes and films licensed from their soon-to-be rivals. In December, Netflix paid a reported US$100 million to continue licensing Friends from WarnerMedia.

We’re in a time of dramatic change for the TV and video business. There’ll be great benefits, and question marks and consequences
Michael Greeson, president of research group TDG

Why are media companies looking to get in? Data and dollars. Sure, they get money when they sell their programmes to other services like Netflix, but starting their own services allows networks and studios access to valuable data about who is bingeing on their shows.

For services with ad-based options, that data translates into more dollars from advertisers. And for services that rely only on subscription revenues, media companies can use the data to better tailor their offerings for individual tastes, helping to draw in more subscribers.

“I think all media companies are coming to grips with the reality that you better establish a relationship directly with your audiences,” AT&T chief executive Randall Stephenson said last month.

The business model that some networks and content companies are now using – distributing their TV shows and film only by licensing them to streaming platforms – is getting “disrupted aggressively” as more companies launch their own services, said Stephenson, whose company acquired WarnerMedia in June.

“Big brands like Disney have to evaluate: Are we only going to access this market by licensing our content to Netflix, Hulu and others?” he said. “Or, can we go direct to the consumer with our own service?”

But a multiplicity of streaming services could easily overwhelm or confuse consumers. To get a full slate of programming, TV watchers may soon have to subscribe to several services instead of just one or two.

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Companies are already trying to tame this chaos by bundling multiple streaming services together. Amazon Prime customers can add subscriptions to HBO, Showtime or Starz. Roku and Chromecast viewers can get access to their different services from a central place; Roku has said it will start selling in-app access to Showtime, Starz and other channels as well.

How should consumers deal with all the coming change?

“Be patient,” says Michael Greeson, president of research group TDG. “We’re in a time of dramatic change for the TV and video business. There’ll be great benefits, and question marks and consequences.”