Written By: Vikas Jha
Will Netflix lose the battle of online streaming
The rise of Netflix is associated with the end of many companies working on fixed cost per unit model. Blockbuster was one such company which saw huge business till the dawn of Netflix. In 1999, when most of the Indians were glued to two channels of Doordarshan, DD National and DD Metro, there was this emerging company slated to transform the entertainment industry.
Unlike other rental companies, Netflix wrought havoc in the market by introducing the DVD rental market on monthly subscription basis. This was a big blow to the erstwhile operating companies who used to charge on the basis of DVD units. They were simply not prepared for this innovative concept. This new mode initiated a whole lot of new world before the users in the form of unlimited renting of DVDs in the backdrop of a fixed monthly cost.
Netflix’s one of a kind subscription model hardly had a substitute which cemented its position in the market.
But with the change in times, company’s fortune has changed as well. The company doesn’t enjoy the same monopoly which it used to have till one decade back. Now, there are many competitors snatching its lion’s pie every day. Netflix is struggling with losing customers to other streaming platforms such as Amazon Prime, CBS, Hulu, Hotstar and others.
In the second quarter of 2019, Netflix increased 2.3 million consumers globally against a Wall Street forecast of 5.1 million users and their own aim of 5 million. On the back of 18 per cent price escalation in January, Netflix witnessed a loss of approximately 130,000 customers in the US only.
Across the United States, Netflix weakens in the pricing segment, when considering various streaming services. CBS All Access, which allows users the access to some all-time famous shows from the likes of The Big Bang Theory, Elementary, The Late Night with Stephen Colbert, together with 10,000 episodes from other series on-demand comes with a monthly price tag of $5.99 and monthly plan free of advertisements at $9.99.
On the other hand, Disney and NBC Universal came together to initiate Hulu, which has more than 85,000 episodes on-demand and famous shows like The Handmaid’s Tale. People can have the access of Hulu at a monthly budget of $5.99 and an ad-free monthly plan of $11.99.
Apart from this, if we talk about one of the most competitive platforms “Amazon Prime Video”, the streaming service costs $8.99/ month while its wide-ranging services under the banner of Prime membership outlays $12.99/month.
Let’s talk about Netflix: its simple monthly plan charge $8.99, similar to Amazon Prime Video. Similarly, when it comes to regular plan, you will need to pay a hefty $12.99, again similar to Amazon Prime video. The most startling plan is “premium” that cost $15.99. It allows you to stream ultra HD (UHD) content. This is the most expensive plan by any streaming platform. Netflix’s plans are facing tough battle from its peers, which is going to intensify soon.
Netflix’s anguishes are going to heighten more when Disney brings its own streaming service, estimated at $7 per month having rich contents much better comparatively to Netflix. Not only this, WarnerMedia (subsidiary of AT&T) will introduce its own service HBO Max, valued at $16/month.
Apart from the US market, Netflix is keeping an eye on Indian market, owing to the rapidly growing internet users. A country that is going to have 1 billon internet users in next 10 years is bound to be the target market of any streaming platform.
Netflix is facing a tough battle from the home-grown service providers in India. Netflix is having a projected user of around 4 to 6 million users in India. Hotstar possessed by Disney (post Fox-Disney unification) has over 300 million consumers.
Pricing is the biggest barrier for Netflix in India. A monthly plan for Hotstar charges from $0.40-$4.30, for Amazon Prime $1.80, for Zee5 between $0.70 and $2.90, regardless of the device. On the other hand, the Netflix subscription starts at more than $7 (INR 499) which goes on to $11.60 (INR 799).
To overcome this fierce battle, Netflix introduced a monthly mobile-only plan for INR 199. Nonetheless, it comes with its own boundaries. First of all, users won’t be able to stream the data on any other device. The second point is that it permits streaming only in Standard Definition (SD).
Netflix enjoyed the streaming world monopoly in the nonappearance of other major competitors for nearly a decade. However, with the streaming tycoons capturing the market, Netflix finds itself losing the battle.