A new era is dawning in the entertainment world and you’re about to get a whole lot more choices—for better or worse. The streaming wars are here.
Titans of media and technology are wagering billions that consumers will pay them a monthly fee to stream TV and movies over the internet. Walt Disney Co. DIS 3.76% is launching a $6.99-a-month service next week, following Apple Inc.’s entry earlier this month. AT&T Inc. T -0.10% and Comcast Corp. CMCSA 1.10% ’s NBCUniversal next year will mount their own challenges to streaming juggernaut Netflix Inc.
The combatants are fighting on the same battlefield, all seeking to lure in subscribers, but they have radically different motivations—and some have far more at stake than others.
Legacy giants like Disney and AT&T’s WarnerMedia are racing to reinvent their core media business, which is under assault as consumers turn away from traditional broadcast and cable TV. For them, selling streaming subscriptions to consumers has to work—and has to be profitable. For Apple, while streaming can advance its business, failure is an option.
Consumers will have choices to make as new entrants join the fray: Americans are willing to spend an average of $44 monthly on streaming video and subscribe to an average of 3.6 services, according to a survey of over 2,000 people in recent days by The Wall Street Journal and the Harris Poll. That is up roughly $14 from what most people pay now.
But with so many existing players already in the market—Netflix, Hulu, Amazon Prime Video, CBS All Access and ESPN+, among others—not everyone can emerge victorious. “This market is going to have to shake out — it doesn’t feel like all these players can continue to play this game forever,” said David Wertheimer, a former president of digital products at Fox Networks Group who is now a media and tech investor.
Netflix is in an enviable position with a big head start, but may be in for some turbulence. Nearly one in three Netflix subscribers said they would likely cancel the service in the next three months to make room for a new entrant, according to the Journal-Harris Poll survey. Some 43% of parents with kids under 18 said they were likely to cancel, as did 44% of men ages 18 to 34.
Their stated intentions may not translate into an actual cancellation. There are currently 158 million Netflix subscribers globally.
Netflix, like any subscription business, has regular customer turnover, and some of those who cancel eventually return. “Like the competition, polls come and go,” a Netflix spokesman said. “But years of experience have taught us that consumers want control over when and how they watch—and a wide choice of quality stories across every genre. And that’s what we’ve always focused on providing.”
Read the full story at Wall Street Journal.