Despite the lack of new programming, the streaming wars continued to heat up with a new competitor entering the fray in late May. Eventually, there will need to be consolidation as consumers become flooded with several different subscriptions. During the initial lockdown, new shows from Netflix, Disney+, and Hulu draw consumers’ attention, but the lack of filming ability with Hollywood stars in quarantine has put pressure on all the streaming services.
High Costs for Each Service
On May 27, HBO launched its new streaming service, which was tailored to go head to head with Netflix and Hulu. HBO max will cost you $15 per month to see original content and old episodes of Friends. HBO launched during the tail end of the quarantine and are hopeful that many of the filming they planned with be able to begin shortly. One of the benefits of HBO Max is that if you already have a cable subscription and receive HBO you will not have to pay anything additional for the new streaming service and its original content.
Eventually, there will need to be some consolidation. Consumers will eventually be unwilling to pay for several different services. Currently, it costs $7 per month for Disney+ to see Pixar and Star Wars films. It cost $15 per month for HBO Max, another $5 per month for Apple Plus, $12 per month for Hulu to see “The Handmaid’s Tale”, $11 per month for Showtime, $9 per month for Starz, $10 per month for CBS All-Access and $13 per month for Amazon Prime.
While most of the programming will capture viewers’ attention for a while, consumers do not want dozens of different subscriptions. What will likely occur is some failures and consolidation. A few firms that offer the best deals with the most programing will win the streaming wars. This will likely be the companies that have the most options the largest library and the ability to afford the high price tag of investing in content.
For example, Amazon Prime can afford to invest in new content to lure consumers to shop at Amazon. Amazon Prime is a subscription service to receive packages within 1-business day but it also gives you access to Amazon Prime. In addition, Amazon Prime sells other services on its platform and takes a cut of the subscription revenue.
Disney could be another winner. It has a giant film franchise that has a library that is vast and should be able to continue to offer large volumes of robust content to its consumers. Disney+ holds the lowest price of all of the streaming services at $5 per month, which should attract consumers, especially those with young children.
AT&T may be another winner, as it can attract wireless customers by giving them HBO Max free. Consumers who are already paying for HBO through their cable operator will be able to enjoy HBO without shelling out additional funds. Lastly, Netflix will continue to spend billions on new shows to defend its global lead in streaming.
During the pandemic, Netflix stock trading continued to outperform. It has broken its records for customer growth. As a new entrant into the streaming, WarnerMedia will need to advance enough new content to keep subscriptions growing to earn the 85 billion dollar price tag AT&T paid to launch the new service.
