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How Netflix won the streaming war | Television

by Isabella Walker
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When Netflix presented results for the last quarter of 2023 on January 23, several financial analysis firms, such as Morgan Stanley and Bernstein, decided: there was already a winner in the platform wars. In the final three months of the year, the company added 13 million new subscribers worldwide, the second-best quarterly figure in history (only behind numbers achieved at the height of the pandemic). In all of 2023, it added more than 29 million new subscribers. The total figure is now 260.28 million. Its revenue grew 12% year over year. It’s the company of streaming with a lower cancellation rate than its subscriptions, just 2% in the United States, well below its competitors, who average 5.3%, according to data from consultancy Antenna published on BusinessInsider.

Last year, the platform wars entered a new phase. After a 2022 in which these services saw the wolf’s ears with the first drops in subscribers on Netflix, in 2023 Wall Street began to pay attention to whether the accounts of these services were healthy and profitable businesses. In this new situation, Netflix has been crowned the big winner. There are several factors that have led experts to declare it as such. On the one hand, it is the platform that sets the pace in Internet television. It was the first major service of streaming which took its ad-supported subscription plan global, which already had around 23 million monthly active users at the start of the year. It is expected that the elimination of the basic ad-free plan and the increase in prices of other options will invite more and more customers to choose to pay less in exchange for watching a few minutes of advertising. It’s a business model that ended up being imposed on streaming and almost all platforms already apply. They were also the first to actively fight against shared accounts outside the home, an unpopular measure but one that ended up bearing fruit. Others, like Disney+, have also followed suit on this point.

According to data from the consultancy firm Nielsen, which measures television audiences in the United States, the time Americans spend on Netflix is ​​more than double that of its closest competitor: of the total time Americans spent watching television in December 2023, 7.7% were on Netflix, compared to 3.3% for Prime Video or 1.9% for Disney+ (YouTube tops them with 8.5%). The same goes for its competitors.

Content Licenses

Beyond the numbers, there is another factor that demonstrates Netflix’s dominance over other on-demand television services. Series like Two meters underground, blood Brothers or, starting from April, Sex in New York, Some of the titles that have contributed to placing HBO in the collective imagination as a reference brand in the audiovisual sector can also be seen on Netflix. The N company and Disney have also signed an agreement according to which 14 series of the second will be made, such as Lost, this is us OR how I Met Your Mother, can also be seen in the United States on Netflix. And such a successful Paramount title as Yellowstone has traveled to some countries outside the United States thanks to Netflix (in Spain, SkyShowtime maintains its exclusive status and will not be available on Netflix). The deals with Warner and Disney are not exclusive, so their digital services will retain those titles.

The HBO series “Blood Brothers” and “The Pacific” are also available on Netflix.

Behind this phenomenon there is a change in mentality regarding the exclusivity of content and this could be seen as a return to the origins. Netflix became strong early on through licensed content. The business benefited both Netflix, which strengthened and consolidated thanks to titles produced and already broadcast by third parties, and the studios, which thus compensated for the decline in DVD sales and benefited from new viewers who purchased their titles . As time went on, those companies realized that their content was fueling a monster that was about to eat them. When they created their own video on demand services, they revoked those licenses to increase exclusivity. When in 2017 Disney wanted to clarify its commitment to streaming He was serious, he publicly broke up with Netflix. Disney CEO Bob Iger even compared content licensing to “selling nuclear weapons to the enemy.”

In 2023, a new change of mentality arrived when companies such as Warner Bros, Discovery or Disney saw that exclusivity had become a burden that did not allow them to profit from products that, on their own platforms, were no longer performing. These are agreements in which, in principle, everyone wins: sellers can obtain an economic advantage that helps them fight against debts that, in some cases, do not stop growing, and buyers can be more efficient in their spending and have more new content at an advantageous price. moment, after the Hollywood strikes, when the slowdown was evident. According to data from What’s On Netflix, a website focused on the platform’s content, Netflix released about 130 fewer original programs in 2023 than in 2022, which is 16% fewer.

At Netflix they are aware of the good returns that this change of mentality in the sector brings them. Ted Sarandos, one of the company’s CEOs, took advantage of the latest results presentation to encourage companies to continue licensing content to them. “We have a long history of helping launch some of television’s biggest hits, such as breaking Bad AND Walking Dead, even more recently Schitt’s Creek. Thanks to our recommendation system and our reach, we can resurrect a similar series Clothes and turn it into a great touchstone of popular culture.” “I like that studios are more open to licensing content again and I like to tell them we’re open to negotiation,” she added.

‘This is Us’ is one of the titles included in the deal between Disney and Netflix in the United States. NBC (Ron Batzdorff/NBC)

Although these agreements are beneficial for both parties, some experts urge sellers to be cautious because they could once again feed a monster that, in a few months, will start to profit a lot from other people’s content if it manages to profit from its plan with ads takes strength. Jason Bazinet, financial analyst quoted in BusinessInsider In a report on the topic, he sums it up this way: “Netflix makes money; everyone else loses it. “Netflix won’t license its originals to anyone, but all the other Hollywood studios are licensing their content to Netflix.”

The chances of their rivals

Not everyone agrees that there is already a winner in the platform wars. And, if Netflix has won, the most complicated thing remains to be done: maintaining leadership. Prime Video and Disney are the rivals best positioned to battle it out. Experts like Lucas Shaw, by Bloomberg, point to sports or children’s programming as Netflix’s weaknesses that its competitors can take advantage of. Disney, with years of advantage in these aspects, is well positioned in these sectors, according to analysts, who also point to the revolution that the incorporation of advertising to Prime Video in the United States and Canada has brought to the Internet television business . United Kingdom and Germany (will arrive in Spain during 2024): including advertising by default in all its subscribers and giving the possibility of paying 3 dollars more per month to not see advertising.

Another great Netflix account is in live event broadcasting. Some of its next big bets point in this direction. On Saturday, February 24, Netflix premiered a grand awards gala, celebrated by the Hollywood Screen Actors Guild. The friendly match between Rafael Nadal and Carlos Alcaraz will be broadcast on March 3. And starting from 2025 Netflix will be the home of the American wrestling star show, Raw, which will mean 52 weeks of live programming in America and the UK. Because, even though he won the war streamingThere are still battles to be fought.

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