Video streaming services: a battle of giants

Trending topics | 26.06.2018

Video Streaming Services - battle of giants

Of all the sectors in transformation, the streaming video is one of the most emblematic. Its services have already been adopted by numerous consumers. According to Strategy Analytics, more than 250 millions homes around the world pay for a subscription to a video streaming service.  

A forecast: this number will reach 300 millions of subscribers by the end of 2018 and more than 450 millions by 2022.  A sector that still is recent, it is already in transition with increased competition: from pure players to the behemoths of e-commerce or entertainment, we are witnessing an unprecedented emulation. Just like transportation, it is this one that offers the most complete service, the richest and the more personalised service that will stand out.

Netflix: the undisputed giant?

With 117,6 millions paying subscribers, Netflix stands out and imposes. Yet not all was won for the company founded 20 years ago and which initially offered rental DVDs distributed by mail! If a Kodak fate hung in its way, it was without counting on the flair of its founder and leader Reed Hastings who took the decision of his life by launching the streaming platform of the same name. Netflix has become so commonplace that we talk about taking(enjoying) a  “Netflix day”. Then comes the second crucial decision for Netflix: to embark in the release of original contents in addition to the film collection, series and documentaries already present on the platform. The Netflix experience is total: all the video available on all your devices for as little as 10€ per month.

Would Netflix have any weakness?

Amazon, Disney, Canal definitely have a card to play

Apart from its own productions, there are few recent movies ( released the same year or the year before) on Netflix. In France, it is the prerogative of CanalPlus and its platform MyCanal. Needless to say that offering the latest movies generates a high interest from consumers.

Other actors entering the video streaming industry: Amazon shows its ambitious with 26 million subscribers in the USA for Amazon Prime Video; Apple announces the launch of its video streaming platform for March 2019, and finally, late  2019, Disney announces the release of a service of its kind. Do they expect to compete with Netflix or develop on their own niche?

What about TV (in all this)?

In the video streaming landscape, we almost forgot to mention some key players. Television channels, internet operators and content producers constitute a complex ecosystem and create sometimes sensitive alliances that constitute an important value chain. Yet, these so-called ‘traditional’ actors have not declared a lump. All the contrary! Their productions increase in terms of quality, and recruit cinema ‘stars”, as recently shown by CanalPlus with Nathalie Baye.

Sign of the importance of channels, many streaming platforms mentioned above are considering offering a TV package to their subscribers. Television channels still remain one of the most important source of content thanks to their relationships with producers as well as their experience in terms of financing. Another asset but fragile, their relationship with internet operators who offers access to their programs through their boxes. The example of the recent clash between TF1, CanalPlus and Orange, shows nonetheless that relationships are complex and pose many questions: what balance of power between content creator and broadcaster and what should be paid, should each actor produce its proposed content? Conversely, all content producers will be able to develop their own platform. The consumer, faced with the multiplication of actors will make their choice: but on what criteria?

What if Netflix is the “Walmart” of video streaming, thus sweeping a large number of consumers thanks to its practicality and its capacity to propose a maximum of “products” in a “same place”? As a consequence, would not there be a space, if not several, for some specialists? Animal documentary, Asian series, ice sports… Video streaming adventures has just started!

PART I – Digital transformation as a marketing and sales lever

This post is also available in: Français

Back to articles