Coming soon to a device near you: Streaming wars
Apple, Disney, Warner hot on the heels of market leader Netflix
WASHINGTON Some of the biggest names in media and tech are gearing up to move into streaming, in what could be a major challenge to market leader Netflix.
Apple is expected to make its move with an announcement on March 25, with a war chest estimated at some US$1 billion (S$1.36 billion) and partners including stars like Jennifer Aniston and director J.J. Abrams involved in content.
Walt Disney has announced that its streaming service Disney+ will be launched this year, as will one from WarnerMedia, the newly acquired media-entertainment division of AT&T.
The new entrants, with more expected, could launch a formidable challenge to Netflix, which has some 140 million paid subscribers in 190 markets, and to other services such as Amazon and Hulu. "It's really going to change the industry," said Mr Alan Wolk, co-founder of the consulting firm TVREV, who follows the sector.
He sees seven or eight powerful players in streaming which will lead to "huge competition for new shows and hit shows."
These rivals are coming into the segment which has been transformed by the spectacular growth of Netflix and a growing movement by consumers to on-demand television delivered over Internet platforms.
In the US alone, an estimated six million consumers have dropped pay TV bundles since 2012, while on-demand services such as Netflix, Hulu and Amazon have been surging, according to Leichtman Research.
But just as Netflix has disrupted traditional "linear" television, rivals are now moving to disrupt Netflix.
Netflix is likely to feel pain, not only from the new rivals, but also from the loss of content from the big libraries of Disney and Time Warner.
These Hollywood firms "have big libraries, so the cost of their content is much lower than it will be for Netflix, which has to pay for all its content," said Ms Laura Martin, analyst with the research firm Needham & Co.
"Netflix will lose subscribers to these new entrants."
WarnerMedia's service will combine content from its premium HBO channel (known for Game of Thrones) and the vast Time Warner library of films and shows.
Disney's service will have its films and TV shows, along with the library it is acquiring from Rupert Murdoch's 21st Century Fox that includes the Star Wars and Marvel superhero franchises and ABC TV content.
J.P. Morgan analyst Alexia Quadrani predicts Disney will eventually become as big as Netflix, or even bigger by signing up 45 million US subscribers and 115 million internationally.
Ms Quadrani cited Disney's "unmatched brand recognition, extensive premium content, and unparalleled ecosystem to market the service".
Disney benefits from its global ecosystem of theme parks, hotels, cruises, and consumer products, she said.
Mr Wolk agreed that Disney "is in a good spot" but predicted that consumers may be overwhelmed by options.
"I think there will be a lot of churn," he said. "People will subscribe to one service to watch one show, and then it becomes easy to cancel and take another." - REUTERS