With Streaming services going full steam ahead, the already established streaming services such as Hulu, Netflix, and Amazon prime will be facing two new coming challengers, Disney+ and Apple TV+.
The question that remains is: is there a place for all the new services to flourish or is it going to be a battle royal with only one streaming service emerging victorious?
According to recent surveys, most Americans voiced their opinions saying that they will most likely subscribe to Disney+, 28% of Americans to be precise.
Two-fifths are saying that they will most likely subscribe to at least one of the new platforms and 11% are planning to cancel their already existing subscription in order to subscribe to one of the new platforms, while 14% said that they will drop their cable/satellite subscription.
In terms of how much Americans are willing to pay, 56% said they wouldn’t spend more than 25 dollars per month, the rest are ready to pay more than that.
In line with what is stated above, the new streaming services will be ferocious challengers to Netflix and Amazon prime out of the gate, although it will be very hard to recoup the billions they have spent on content given the subscribers’ price resistance.
“Over time not all these players are going to survive,” says P. K. Kannan, a marketing professor at the University of Maryland. He says that the small playing fields and the finite number of subscribers as well as the costs will tighten the competition. This statement seems to hold true since recently, Sony announced recently that it will shut down its PlayStation Vue, its streaming service.
Amongst the newcomers, Disney has a clear advantage and it won’t take too long before the already existing platforms feel the sting, especially that Disney acquires the rights to an armada of movies and American classics in addition to the newly acquired brand “Fox” and others such as Lucas Arts, Pixar, and the giant marvel.
Not forgetting about apple, the second most valuable company in the world, who will be implementing an ambitious marketing strategy by offering the first 12 months of Apple TV+ for free to people who purchase new apple devices, those people weren’t accounted for in the surveys above.
Hulu streaming service will get the most heat since it stands to lose the most to the new services; it has the highest percentage of users who intend on canceling their subscription in order to subscribe to the new platforms. As for Netflix, they will be in a tough spot since they aren’t included in any subscription bundles and they will be losing rights to some of their most lucrative shows including “Friends”, “The Office” and “PARKS and Rec”.
Amazon prime is poised to lose the least, given the fact that people aren’t paying for Amazon prime for its streaming service but for its delivery system.
As mentioned before, these services are pouring billions into new content, hoping to attract the most subscribers, but by doing so they are exposing themselves to losing a lot of money, so to recoup their losses, they are intending to jack up the prices later which might be a dangerous endeavor given the fact that most viewers are not prepared to spend more than 25 dollars monthly.
In one comment, Jonathan Knee, a professor of media and technology at Columbia Business School says: “The idea of pricing below cost in the hopes that you will magically jack up prices dramatically later feels like a pretty dangerous route to take”.
Interesting numbers: 29% of Americans are watching streaming services every day, among this group, 40% are planning on subscribing to at least one of the new platform.
