Time was, to keep up with the water cooler chat, you only had to subscribe to Netflix, Amazon Prime and, at a push, Now TV. Those halcyon days are over.
Blame Netflix, the biggest beast of the field. The success of the company’s business model, its impact on consumer behaviour and its dominance in conversations about the future of entertainment – at a time when other cash-rich tech titans such as Google and Facebook are getting ever more interested in content – have put Hollywood on a war footing. This has resulted in a wave of plus-size mergers and acquisitions among America media giants. The end game? To create streaming services backed by catalogues and coffers deep enough to present the prime mover with serious competition.
The behemoths are already making headlines. Disney’s acquisitions include Marvel Studios, Lucasfilm and 20th Century Fox, and it has debuted its streaming service Disney+ in the US ahead of an international roll out over the coming two years. AT&T now owns WarnerMedia – whose portfolio includes Warner Bros, HBO and DC Entertainment – and will launch HBO Max next spring in the US (it will later consider overseas expansion). Then there’s the NBC and Universal merger, which will result in an as-yet-unnamed service coming to the UK in 2020; and analysts speculate that the recent CBS and Viacom merger will also result in a further Netflix competitor.
Finally, there’s Apple, which is a subtly different case. Sure, its Apple TV Channels aggregator has partnered with the likes of HBO, Starz and Showtime – but as the world’s first publicly traded trillion-dollar company, Apple is able to spend a reported $6bn on original shows and films for Apple TV+. This launched in Autumn with high-profile talent including Steven Spielberg and Oprah Winfrey on board.
Exhausted? Don’t forget the local broadcasters. To keep Netflix at bay, they are joining forces to create their own compelling offers. Just as France Télévisions, TF1 and M6 are combining to launch Salto in France in 2020, so the BBC and ITV have launched BritBox in the UK.
Instinctively, choice seems like a good thing, but in this instance there are clear downsides. As content creators move their shows away from Netflix and on to proprietary services – look at NBCUniversal’s decision to repatriate the American version of The Office – it means that fans of those shows will have to pony up for yet another subscription. In the short term, this may cause an increase in piracy. To Tony Gunnarsson, a principal analyst at Ovum, a more pressing consequence, however, is simply that it’s a nuisance. “It becomes very impractical to have multiple services,” he says. Users not only have to work out what shows are on which platforms, but also acquaint themselves with numerous different interfaces. “I don’t think that more than four or five is practical.”
The atomisation of the market will likely lead to bundles of services being offered at a discount. Some fear that this will create a situation much like the bad old days of cable, where the perennial complaint was how much of your package you didn’t use. Disney has already announced that it will offer a cut-price bundle of Disney+, Hulu and ESPN+. “Apple will have to respond to that and do something similar,” says Gunnarsson. The smaller players are also likely to follow suit. “None of them can expect to be multi-million subscribers services unless they do something like that.”
So how worried should Netflix be? Eric Schumacher-Rasmussen, vice president of industry news site Streaming Media, is unequivocal. “Netflix has to be shaking in its boots. As the veteran, it has got the most to lose,” he says. While he doesn’t see Netflix dying any time soon, he believes it will have to double down on tentpole shows. “They’ve got their Stranger Things, and Orange Is The New Black and The Crown. But they haven’t quite got their Game Of Thrones yet. I think they’re going to need that in order to keep people coming back.”
Charlie Burton is the senior commissioning editor of GQ
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