netflix-competitors

Netflix Competitors

Netflix is the largest streaming video subscription service in the world. Created by Reed Hastings and Marc Randolph in 1997, the company has revolutionized the video content subscription model with over 139 million subscribers in 190 countries. The success of Netflix is due to two factors. The first is a recommendation system that gives suggestions on what customers should watch based on their viewing history. The second is the vast catalog of content on offer – produced by third parties and by Netflix itself. These factors have resulted in Netflix competing against influential TV networks and film producers for viewership. 

Amazon Prime Video

amazon-prime-video-revenue-model-explained

Prime Video launched in 2006 and has already earned 150 million subscribers in 200 territories globally. 

The platform is available to exist Amazon Prime users, giving them access to thousands of movies, shows, music, and documentaries.

Like Netflix, Amazon has recently begun producing its own content under the Prime Originals banner.

In emerging economies with poor connectivity, users can download videos to watch offline.

At present, a yearly Amazon Prime Video subscription can be had for $119 per year – or $9.92 a month.

This is significantly cheaper than two of Netflix’s three pricing tiers.

Disney Plus

disney-swot-analysis
It would be hard to argue the case for a more recognizable entertainment brand than Disney. Disney is of course synonymous with Walt Disney, but it was Walt and his brother Roy who started the company in 1923 in Burbank, California. Disney content is now broadcast on over 100 channels in 34 different languages across the globe.

Disney Plus offers a wide range of content, including the Star Wars and Marvel franchises, animated masterpieces, and documentaries.

After acquiring Fox in 2019, Disney further expanded their catalog to include classics such as The Simpsons.

Given the longevity of parent company Disney, the streaming service also features content stretching back 70 years.

This gives Disney Plus a certain nostalgia for many viewers that Netflix will find impossible to replicate.

At $6.99/month or $69.99 for a year, Disney Plus is more cost-effective than even the cheapest Netflix plan

HBO on Demand

HBO has been creating premium content for over 40 years.

However, the company is a relative newcomer to streaming with 50 million subscribers in the USA and a presence in Latin America and Europe.

HBO on Demand is home to some of the most popular shows in recent history.

This includes Doctor Who, Friends, and Game of Thrones.

In 2015, the company launched HBO Now as a direct-to-consumer service with no requirement to subscribe to a cable or satellite system.

HBO Max was launched in 2020, incorporating content from Turner, Warner, and Warner Bros. Pictures.

Hulu

Hulu is a unique Netflix competitor in the sense that it gives consumers access to content right after it has aired on major networks.

In fact, Hulu’s view on demand (VoD) catalog features over 85,000 series episodes.

Hulu has also secured access to the majority of FX channel original content, giving it a slight edge over Netflix.

It also has produced popular original content such as The Handmaid’s Tale.

The company has managed to secure close to 40 million users in the United States alone, second only to Netflix.

This has been achieved through a proactive strategy of discount promotions and the packaging of streaming content with live television.

Key takeaways:

  • Netflix has revolutionized the video subscription model and enjoys significant market share as a result. The company has a vast catalog of content which puts it in direct competition with TV networks and producers.
  • Amazon Prime Video is perhaps the most significant Netflix competitor because the platform has the resources necessary to emulate the Netflix model.
  • With a back catalog spanning more than 70 years and several major rights acquisitions, Disney+ also enjoys a significant market share.

Related Frameworks

netflix-business-model
Netflix is a subscription-based business model making money with three simple plans: basic, standard, and premium, giving access to stream series, movies, and shows. Leveraging on a streaming platform, Netflix generated over $29.6 billion in 2021, with an operating income of over $6 billion and a net income of over $5 billion. 
netflix-licensed-vs-produced-content
netflix-content-arbitrage-multiple
In order for Netflix to keep its business model healthy over the years, it needs to keep investing in content, which the company needs to be able to monetize. Therefore, the Content Arbitrage Multiple is a ratio made of Revenues/Content Investments, which tells us the ability of the company to generate revenues for the content investments performed. For instance, in 2021, the Content Arbitrage Multiple was 2.4x. Indeed, on the $29.7 billion of total revenues in 2021, Netflix had invested over $12.2 billion in content. This was a 5% growth compared to a Content Arbitrage Multiple of 2.3x in 2020.
is-netflix-profitable
Netflix is a profitable company, which net profits were $5.1 billion in 2021. Growing from $2.7 billion in 2020. The company runs a negative cash flow business model, where it anticipates the costs of content development and licensing through the platform. Those costs get amortized over the years, as subscribers stick to the platform.
netflix-vision-statement-mission-statement
Netflix’s core mission, strategy, and vision are that of “improving its members’ experience by expanding the streaming content with a focus on a programming mix of content that delights members and attracts new members.”
binge-watching
Binge-watching is the practice of watching TV series all at once. In a speech at the Edinburgh Television Festival in 2013, Kevin Spacey said: “If they want to binge then we should let them binge.” This new content format would be popularized by Netflix, launching its TV series all at once.

Read Also: Netflix Business Model, Binge-Watching, Netflix SWOT Analysis, Netflix Vision Statement, Is Netflix Profitable.

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