A change is coming to the streaming TV market that could completely disrupt the industry. It’s a change that has the industry leader Netflix worried – and rightly so.
For a long time now, Netflix has ruled the roost when it comes to watching TV online. Netflix was founded back in 1997 by Marc Randolph and Reed Hastings as a video rental company. Back then, video streaming didn’t exist as a service – instead, customers would order a movie on the website, but then the film would be mailed out on a DVD. Internet connections at the time couldn’t handle the amount of bandwidth needed to stream in real time. It would’ve taken days to download and watch a two-hour movie.
In 1999 they shifted to an unlimited movie subscription where a fixed monthly fee meant you could watch as much content as you like, but the films still came on disks that had to be mailed out (and back).
In 2000 they developed a personalized movie recommendation service, and by 2003 there were over a million customers.
You can see all of the advancements coming together, but it wasn’t until 2007 that they launched their first internet streaming service in the US.
In the following years, their service started to spread globally, with Canada getting service in 2010. In the first quarter of 2019, Netflix had grown to 148 million subscribers worldwide. Netflix’s net worth as of June 2019 was $155.53 billion.
However, all this may soon change as Netflix is about to see its first real competition. The real problem Netflix has is “content”, and they realized this back as early as 2015. You see, Netflix for a long time was a company that provided access to content produced and owned by other companies. Through a series of contracts, they bought the rights to stream this content in different countries.
The problem now is that the companies who provide this content have seen just how much money Netflix is making from it and want to do the same themselves.
The biggest of these companies is the behemoth known as Disney. For years now, Disney has been slowly acquiring different content producers. Companies such as Pixar (famous for the animated movies such as Toy Story), Lucasfilm (famous for the Star Wars Franchise) and Marvel (famous for the Marvel comic superhero movies).
Disney have now officially announced their own streaming service called Disney+ which is launching in November. At the same time, the contracts with Netflix are ending and they’re pulling all of their content back. Come November, if you want to watch any Star Wars movies online, the only place you’ll be able to see them will be Disney+. And Disney are developing new content, for example “The Mandalorian”, a spin off series from Star Wars, and the only place you’ll be able to watch it is, yup, Disney+.
And it’s not just Disney doing this. WarnerMedia, NBC Universal, Discovery and more are all starting their own streaming services. And crucially, if they have content on Netflix – they’re pulling it all back.
All this could mean Netflix is heading for a lot of trouble if they don’t evolve. The only thing that may save them is original content, and they’re spending billions every year on it. They need to produce enough TV and film content to keep subscribers interested.
Chances are, customers may pay for a couple of streaming services. Disney+ have announced that they’re going to charge $9 per month, and its likely other services will be a similar price.
There’s going to be a lot of competition, and the key will be content. As of November, a lot of that content will be owned and controlled by Disney.
It’s going to be interesting to watch the battle begin in November. Competition is always a good thing, but I’m worried a lot of content is going to be unreachable because it’s on one of the streaming platforms you don’t subscribe to.
Nick Gunn is a regular contributor to publications within The Advocate family, and is a Nova Scotia based IT, design, and tech specialist who operates Scotia Systems. If you have a tech related topic for Nick, email him at email@example.com