Study: Turning content dollars into audience - Page 29

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Increased competition, especially from Amazon

Prime and Disney+, may be counterintuitive

because it could actually help Netflix in its

expansion strategy: On the one hand, it would

be disadvantageous for Netflix to have a

monopoly in most markets, as it is beneficial to

be part of a segment of different streaming

players. On the other hand, multiple strong

streaming players can further push cable and

pay-TV offerings out of the market, since

consumers are spending more on streaming

services in general.

This is also in line with the goetzpartners

customer survey, which highlighted that most

customers are willing to spend money on two to

three streaming service subscriptions per

month. However, if the rise of Disney continues

at its current pace (adding more than 100

million subscribers in one year), Netflix will

need to take further action besides trying to

catch up in the kids and superhero segment.

Furthermore, Disney benefits from the fact that

it was able to build its brand over the last 50-60

years.

Looking at Amazon Prime, the comparison with

Netflix seems more difficult, even though it is

regarded as the more serious competitor in the

market according to the experts’ opinions.

Netflix is fully focused on one key segment,

i.e., the entertainment segment, while Amazon

Prime sometimes cannot focus on its

entertainment part, because its key purpose is

to sell and deliver consumer products via its

website.

However, the recent acquisition of MGM by

Amazon Prime is shaking up the streaming

market: Paying over $8 million, Amazon Prime

receives exclusive rights to different block-

buster movies like James Bond, Rocky, and

more than 17,000 shows. Furthermore, Amazon Prime has also entered the sports streaming

segment (e.g., securing broadcasting rights for

Champions League games) and is trying to

further differentiate itself from Netflix, which

has not yet shown any ambitions in entering

the live sports segment.

Overall, these recent strategic moves by

Amazon Prime reveal that it aims to increase

both its content quality and quantity and to

catch up to Netflix to put pressure on its

market leadership position.