Netflix Loses Ground
As the company that pioneered streaming, Netflix (NFLX) dominated the industry during the 2010s. But, in the new decade, Netflix’s dominance has faded as its competitors gain ground.
Since January 2020, Netflix has seen its share of the streaming market decline by 13%. It has fallen from almost half the market at 46% to a mere third at 33%, as competitors bolster their offerings. In particular, Disney+ (DIS), HBO Max (WBD), and Apple TV (AAPL) have all made significant headway recently.
Competition Heats Up
One of the biggest threats to Netflix is the fact that other streamers are starting to bundle different services in order to make subscriptions more attractive to consumers.
For example, Disney bundles Disney+, ESPN, and Hulu into a single package, giving subscribers access to a wide range of content for one set price. Meanwhile, Warner Bros is in the process of merging HBO Max and Discovery+, which should be finalized by mid-2023. And Amazon (AMZN) offers access to Prime Video through Amazon Prime. Therefore, Prime members get more than just streaming — they enjoy a whole host of ecommerce benefits.
As if that wasn’t enough, Netflix is dealing with widespread unauthorized use of its platform. The company estimates that 100 million users globally use Netflix for free by sharing passwords.
For viewers, having too many shows to stream may be a headache, but too many streamers is a great thing.
In general, increased competition benefits consumers. Streaming companies will continue to bundle services, offer deals, and invest in content in an attempt to make their subscription the best deal in the bunch. For example, despite making extensive layoffs to reduce costs, Netflix still allocated $17 billion for new content this past year.
All of this results in a win for consumers, who can expect better shows and more services at lower price points. It’s a win, that is, if you’re paying for your subscription at all. But for the password sharers out there, unfortunately, it means the free ride has reached the end of the line.
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