uploads///Media OTT Trends Q

How’s the Competition Shaping Up for Netflix?

By

Updated

Hulu’s online television service

Netflix’s (NFLX) competitor Hulu is expected to launch an online television service in 1Q17. According to a Wall Street Journal report, The Walt Disney Company’s (DIS) channels and 21st Century Fox’s (FOXA) Fox News, FX, and regional sports networks are also expected to be available on Hulu’s online TV service.

Article continues below advertisement

Amazon’s recent initiatives

Amazon (AMZN) has been increasingly focusing on its $99-per-year Prime program, but it has evolved into a potent video streaming player, as well. Recently, it launched its Video Direct service, which lets content creators upload videos for Prime members and earn royalties. This service directly challenges the bread-and-butter business of Alphabet’s (GOOG) YouTube.

In December, Amazon announced its Streaming Partners program, an OTT (over-the-top) subscription service. This program lets users watch shows from CBS (CBS), Showtime, Starz, and dozens of other networks for a subscription fee. Users can subscribe to Showtime and Starz for $8.99 per month.

According to a Digitalsmiths’ 4Q15 video trend report and as the chart above shows, Netflix (NFLX) leads the OTT market with a share of 48%. Next is Amazon with a 20% market share. Hulu, Time Warner’s (TWX) HBO Now, and CBS All Access are smaller players in this market.

HBO Now

Netflix referred to HBO Now in its 1Q16 earnings call. It stated that it believed HBO Now must already have surpassed 800,000 subscribers, considering that the OTT service is available on different platforms, including Microsoft’s (MSFT) Xbox One and Apple TV (AAPL).

HBO Now’s parent company, Time Warner, expects HBO Now’s revenue contribution to the company’s total subscription revenues to increase in fiscal 2016. Time Warner stated earlier this year that HBO Now was close to reaching 1 million subscribers.

OTT services from pay-TV operators

In April, Dish Network (DISH) launched a new multi-stream version of Sling TV priced at $20 per month. AT&T’s (T) DIRECTV is also set to launch three OTT services this year. Comcast (CMCSA) has also launched its own IP-based (Internet protocol) service called Stream.

In the next part of this series, we’ll look at some factors that could affect Netflix’s stock price.

Advertisement

More From Market Realist