The end of Netflix's golden age?
Le marché du streaming se diversifie.
Si Netflix a, depuis 2007, révolutionné l’industrie télévisuelle en donnant aux utilisateurs l'accès instantané à des séries et à des films, cela fait quelques années qu’elle n’a plus le monopole du streaming. Déjà en compétition avec Amazon Prime, l’entreprise aux 137 millions d’abonnés risque d’être ébranlée cette année par l’arrivée de nouveaux rivaux...
The streaming pioneer Netflix’s first mover advantage has taken it to nearly 150m global subscribers – but serious competition is now coming as traditional media companies and Silicon Valley rivals fight back. Disney, with the might of its super franchises from Marvel to Pixar and Star Wars, is set to join the fray with its own streaming service, Disney+. The world’s largest entertainment group is banking on its content clout to help make its relatively late entry into the market a success. 2. The AT&T-owned WarnerMedia is also prepping a service that will include content from HBO, Turner and the Warner Bros film studio. WarnerMedia has not been as combative as Disney in pulling content from Netflix. But Netflix’s willingness to pay $100m (£78m) to keep Friends for one more year – at which point WarnerMedia will have to decide whether to keep it exclusively for its own service – highlights the value of crowd-pulling content and the problems Netflix could face if media companies reassess their content strategies. Netflix previously paid $30m a year for Friends, which has proven one of its biggest hits globally.
PREVIOUS CONTENT SUPPLIERS
3. “Netflix is facing increased competition from some of its previous content suppliers,” said Richard Broughton, an analyst at Ampere Analysis. “Despite its major focus on original content the company is still hugely reliant on licensed content for subscribers and that carries risks.”Ampere estimates that Netflix original productions in the US make up only about 8%
of the hours of content available in its vast library, and 9% in the UK. A further 5% of hours is labelled as original by Netflix because it airs it first, but is actually acquired from content suppliers, such as Star Trek: Discovery.
4. “Individually any one of the big Hollywood studio groups does not make up a huge proportion of Netflix’s catalogue, maybe 4% or 5% of total hours,” says Broughton. “If one or two pull their content Netflix can plug the gap. But if the market gets more aggressive against Netflix, it is going to get tougher.”
THE BIGGEST RIVAL
5. Netflix is already facing off against Amazon’s Prime Video, a global rival with ambitious plans including a Lord of the Rings extravaganza. A rattled Netflix upped its content budget by 50%, from $8bn to $12bn, when Amazon announced it would spend $5bn this year. But Amazon could easily outspend rivals: its market value is six times bigger than Netflix and 4.5 times the size of Disney. Netflix will also be looking over its shoulder at Apple, which is widely expected to launch a global streaming service this year.
6. The content arms race is costing Netflix dear. The company expects a negative free cash flow of $3bn-$4bn this year – meaning the amount it spends on content, marketing and other costs in 2018 will exceed what it earns from subscribers by at least $3bn. Netflix keeps turning to debt markets to top up the funds it needs to continue to feed film and TV content to the bingewatching generation it helped create – its net debt was $8.34bn at the end of September, up over 70% year-on-year.
CHEAPER CONTENT
7. Netflix built its reputation and audiences from expensive dramas, such as The Crown. It has recently started to focus on cheaper, yet popular, unscripted shows – snapping up the Channel 4 reality show The Circle to make it in multiple markets – with the Netflix CEO Reed Hastings highlighting the value of such fare.
8. “Unscripted television has always been a hugely profitable sector,” says Lucas Green, head of content at Banijay Group, maker of shows including Survivor, Temptation Island and Wife Swap. “Drama has always got the headlines and red carpet treatment. Yet, game shows, quiz, reality TV, dating, baking and talent shows are highly returnable, faster to produce, more cost efficient and therefore lower risk. ”
OUTSIDE THE U.S.
9. Netflix is also facing pressure outside the US, which is increasingly nearing peak Netflix, for the next cycle of growth. Well over 80% of the new subscribers added by Netflix in the third quarter came from outside the US. The company has been very bullish on the prospects of the Asia-Pacific region, particularly India. But Netflix’s pricing makes it a premium service compared with pay-TV and streaming rivals in many of these new markets and it may have to cut prices – meaning it will need more subscribers.
“Unscripted television has always been a hugely profitable sector.”
10. Which rival will be the biggest threat to Netflix? Broughton reckons it is Amazon: “If I had to put my money somewhere it would have to be on Amazon. New players like Disney and WarnerMedia will need a lot of time and marketing to break into households, and who else will want to licence content to them? Amazon has the deepest pockets. Its catalogue is by far the largest, even if a lot of the content is quite old, and it has been exploring sports rights and other areas other players aren’t. ”