Is The Future of Netflix ‘Doomed’ As New Competition Arrives
Foxtel, Stan and Netflix are all sweating over the roll out in November of an all new entertainment streaming service from Disney called Disney+ which could cause “mayhem” in the Australian market according to Industry executives.
Stan who had a contract with Disney knows the pulling power of Disney content with some observers even claiming that Disney+ could mark the beginning of the end for Netflix.
ChannelNews understands that a major briefing will take place on August 23rd when local streaming Companies will know whether they will get a share of the Disney action in Australia.
Foxtel who is witnessing demand for the combined Netflix Foxtel Sport combination believes they can deliver Disney the same way that they currently integrate Netflix.
Tipped to be around $100 a year subscription what consumers will get for this is a bundle comprising Disney+, Hulu (which Disney took over in May) and ESPN+ which, Disney controls.
At this price Disney will be considerably cheaper than Netflix who are over $13 a month in Australia.
Disney’s Marvel franchise gives the new Disney+ service one heck of a selling point claims TV reviewer John Archer.
“The aggressiveness of Disney’s initial pricing will have sent a collective shudder down the spine of all its streaming rivals, of course. But Netflix’s size and business model make it look particularly vulnerable to Disney’s new challenge – especially now we know about the Disney package deal” wrote Archer.
Unlike rival streaming services from Foxtel, Stan, Apple and Amazon, Netflix seems highly unlikely to ever offer even the basic Disney+ service as an add-on extra.
During the Q2 earnings announcement where the Disney+ bundle price was revealed, Disney CEO Bob Iger stated that his company was ‘in discussions with’ Apple, Amazon and Google to get Disney+ on those platforms. Netflix was not mentioned.
According to Patrick Delany the CEO of Foxtel the News Corp owned Company has already held discussions with Disney while Stan has admitted that they Don’t have a contract with Disney past December 2019.
While Foxtel has lived local sport, Netflix has none.
Netflix’s head of business development in EMEA, Maria Ferras, told Variety recently that Netflix has no plans to start carrying live sports events of the sort that might allow it to provide some competition for the Disney+ bundle’s ESPN service.
It’s also been speculated that ESPN could play a “long game” and bid for Australian sports contracts when they become available locally.
Amazon, by comparison, has started to carry some pretty high-profile live sports coverage, including exclusive rights to the US Open tennis in the UK. Optus and Fetch TV now have the UK Premier League.
Archer said, “Netflix’s only avenue for keeping its subscriptions up, comes down to attracting people with the content”.
He claims that when Netflix started its streaming platform competition was practically non-existent, and it was just another simple way for studios to make a bit more money from content they’d previously been able to monetize through cinema or linear broadcast channels.
These days, though, with so many of those studios, including now the world’s biggest, deciding they want to take control of their own content over their own streaming platforms, Netflix’s status as a ‘one stop shop’ for pretty much all your entertainment needs isn’t just on the wane, it’s already gone.
Worse, the owner of what will surely have been many of the most popular films on the Netflix platform, Disney, now has its own streaming platform reason for keeping the best streaming terms and conditions for its high-profile films to itself.
One big loss for Netflix was the Marvel franchise which Disney also owns along with the Star Wars franchise.
Netflix has been fending off the potential arrival of Disney by spending billions in recent years developing its own original content and trying to secure exclusive talent deals. Last week Netflix signed up Game of Thrones creators David Benioff and D. B. Weiss, to a multi-film deal.
Ironically many of the original shows Netflix built its home-grown content reputation on are based on Marvel characters.
Currently the Netflix business model is built on Netflix funding its own content from their current subscriber base.
Only a very limited number of Netflix films have enjoyed cinema runs, and aside from a few trials, it hasn’t started to include ads with its streams.
Disney, on the other hand, can enjoy returns on at least some of its biggest investments through frequently colossal cinema runs an example being the recent Avengers move that became the biggest grossing movie of all time.
Even if Netflix managed to achieve a near perfect record of quality and acclaim with all its new shows, it still couldn’t control what Disney might get up to with its vastly recognizable properties and colossally deep pockets said Archer.
Another area Netflix could try to keep consumers loyal to its cause is AV quality. It pioneered the use of 4K, HDR and Dolby Atmos sound on streamed content with its home-grown shows, and we don’t yet know the full details of what Disney is planning to offer on the AV quality front with Disney+.
Currently Netflix doesn’t support HDR or 4K on most of its third-party movie content, Disney currently doesn’t allow Apple TV to show its films in 4K HDR and only provides them in 4K HDR to Google Play.
Disney is looking at using 4K HDR support on Disney+ as another way of attracting subscribers to its new service.
The problem for Stan and Foxtel is that it’s likely, that as more and more streaming services appear, consumers will cancel and restart various subscriptions based on whether a platform has a new show they want to watch.
Netflix seems to me to be particularly vulnerable to this behaviour clams’ analysts.
The future for both Stan and Disney are in the balance claim observers and Disney is the “100 kilo gorilla who has entered the arena”.