USA Today reports that Netflix "recently forecast it will have over 190 million subscribers worldwide at the end of the quarter. Its normal growth rate, plus a surge due to the pandemic, could push that number above 200 million by midyear. In a market in which most people pay for only two or three streaming services, Netflix's size and rapid rise mean trouble."
Trouble, that is, for all the new streaming services that have come online in recent months, including HBO Max, Disney+, Apple TV+, CBS All Access, Peacock, and Quibi.
The story goes on: "Among Netflix's advantages are that it has turned its subscriber base into a revenue-creating machine. It should bring in $25 billion this year. Net income should top $300 million.
"Its one major weakness is that it has made and must continue to make a huge investment in original programming to keep current subscribers and add new ones. It carries $14 billion on its balance sheet, against cash of $5 billion. Investors have largely ignored that challenge. Netflix has a market value of $188 billion."
- KC's View:
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I have no idea how the economics of this will play out over a long period of time; it is hard to imagine all of these services, plus Amazon Prime Video, plus a bunch of new ones that are likely to emerge, continuing to be grow at this rate. At some point, there may have to be some mergers, or some reduction in the fees charged to viewers - it is hard to know what the traffic will bear.
But I do think there is a valuable lesson in how they are coming to market and differentiating themselves - it is all about creating proprietary content that cannot be found elsewhere.
CBS All Access makes itself essential with its Star Trek offerings, including the new "Star Trek: Picard" and "Star Trek: Discovery" and the planned "Star Trek: Strange New Worlds."
Amazon Prime Video has tons of stuff I love, including "Bosch" and "Jack Ryan."
I was a little skeptical about Disney+, but ended up getting hooked on "The Mandalorian" and am over the moon about "Hamilton," which will debut on July 3.
Haven't really made up my mind yet about Apple TV+ or HBO Max. There are, after all, only so many hours in the day.
But this is what retailers have to do. Offer products and services (and even attitude and vibe) that nobody else has. Otherwise, you become me-too, which is a dangerous place to be these days.
