The [roaring?] 20s will be nearing an end ten years from now. What company will be gone? Who will be the greatest casualty of the next decade? The answer is Netflix.
Take a look around at major media and you’ll notice that a lot has changed in recent months. There are seven major players. Disney+, NBC Comcast, HBO Max, Apple TV+, CBS All Access, Amazon Prime, and Netflix. All in, these services will cost you at least $70/month. Most consumers are not going to shovel out that much cash on a regular basis for content. So, who will break out, and who will fall behind? Look for Netflix to be the biggest loser.
In two months Disney launches their monstrous new platform. The streaming service includes and incredible list of content. It will comprise of Hulu, Marvel, Fox, Disney, ESPN, ABC, Star Wars, and Pixar. The content will be endless and at a $4.99 price point it’s a no brainer. This will become a staple in nearly every home within a few years.
NBC Comcast’s Peacock
NBC Comcast has begun to rip shows off of Netflix such as Friends and The Office and started creating their own platform for viewers. They already have a massive sports network that competes with Fox, ESPN, and CBS, as well as their incredibly large network of channels such as Bravo, Telemundo, and E!. They, like their competitors, have announced new series exclusive for their viewers. Also, they have a built in competitive advantage with Comcast. They can target folks who have yet to officially cut the cord. This platform will do just fine.
HBO is and always has beat to their own drum. They are doing fine, and expect them to continue to pioneer their own content and remain a staple on people’s TVs. They have an edge over Netflix as a stand alone provider because they were first in the space. They have a respected name, and a laundry list of hits for decades now.
Apple has unveiled their upcoming attempt to take on this space. Like Disney+, they’ll price their service at $4.99 and try to capitalize on the fact that their devices sit in everyone’s pocket. Just take the quote from Oprah to drive that home.
“I’m joining forces with Apple. They’re in a billion pockets, y’all,”
Speaking of Oprah, Apple intends to capitalize on star power to garner success and cement itself in this space. Hard to bet against that.
CBS All Access
CBS has finally reconnected with Viacom to combine powers and become a competitor that rivals the size of NBC. A ton of channels, as well as dominance in the sports space. They’re ahead of NBC by releasing their subscription model last year, and have already curated shows that are only available on the platform, such as Jordan Peele’s rendition of The Twilight Zone. Expect this new look for CBS to succeed.
Amazon has a sizeable advantage with their existing Prime membership base. Sports seems to be a focus for the company. Some Fox Sports assets still sit out there in space, but Amazon gobbled up a chunk of them recently. The assets were regionally based, which is big business. This is especially true for sports like baseball and hockey. Also, they have an agreement with the NFL for Thursday Night Football. The amount of content on Prime still seems to be small in comparison, however it is hard to bet against a company the size of Amazon. Especially one that has the footprint they have in terms of a member base. It does leave one to wonder what is next for the service. They have room to grow.
Netflix went all in on the original content route after they licensed the rights to as many shows and movies so they could bolster their membership base. They have a threat on two fronts and the disruptor is about to become the disrupted.
Hollywood has fought back and while most famous actors have danced a bit with Netflix, they are still working with big studio heads and the old Hollywood model. Netflix has tried to rework contracts and negotiations in this space with their massive investment, but it has yet to stick with the labor force.
They’ve lost the rights to a lot of the shows and movies they’ve licensed and are hemorrhaging content across the board to the previously mentioned competitors now that everyone has caught up. This leaves them reliant on their own content. They’re trying to go down this road by expanding their documentary content but it seems too little, too late. This is most evident with the deal they made with the Obama’s and recently a partnership with Jay-Z / Beyoncé.
What do they need to do?
They have to find a dancing partner. Netflix cannot remain solo. They do not command the experience and the decades of success HBO has with the independent content model.
But, how does this happen?
First they must hope that their CEO can realize his success in a previously impenetrable space. This should be recognized as absolutely incredible. Next, he should have the humility to understand he took it as far as it can go. He needs a partner to keep going.
There are a few options. First, partner up with Amazon and couple with their sports partnerships and assets. This gives Netflix live content, and inserts their footprint into a space that seems to provide never ending dividends. Also, Amazon is definitively the weakest player in terms of their own content through Prime. It is hard to imagine Amazon and Netflix coming to terms with one another, but it does make sense for both parties.
Another area where Netflix can focus is partnering with one of the cable companies. The most likely suitor is CBS/Viacom as they are smaller than the NBC/Universal/Comcast juggernaut. This would afford Netflix a reliable and proven partner in the space, give them live content, and sports. Problem is, there’s almost no chance the two can agree due to size and ego. It’s hard to imagine CBS/Viacom bowing and ceding control to Netflix and its almost as difficult to imagine Netflix giving up and losing part of their autonomy to them.
The fact is, Netflix cannot do this alone. They need a partner if they want to succeed or things will rapidly deteriorate and we’ll remember the days we obsessed over Stranger Things and Orange Is The New Black, while we binged watched The Great British Baking Show in between. Ten years from now we’ll be scoffing at it since the company will be last on the list in the streaming space. Time is ticking.