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Competition in the Streaming Space Might Dent Netflix’s Dominance

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Jan. 3 2019, Published 2:39 p.m. ET

The content king

Netflix (NFLX) is a content king, and it remains focused on investing in original content as well as original programming to grow its subscriber base. In the third quarter, Netflix added ~7.0 million subscribers, higher than its expectation of 5.0 million. Netflix’s subscriber additions in the third quarter were also 31% higher than the 5.3 million subscriber additions it saw in the third quarter of 2017 and 33.8% higher than the 5.2 million additions it saw in the second quarter of 2018, signaling higher demand for video streaming services.

In the fourth quarter, the company expects to add a total of 9.4 million subscribers, and it expects to see paid subscriber additions of 7.60 million. The company’s total subscriber base is expected to hit 146.5 million at the end of the fourth quarter.

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Growing competition in the streaming space

The growing popularity of streaming services has attracted a large number of companies to the streaming space, which has stepped up the competition for Netflix. Players such Amazon’s (AMZN) Amazon Prime, Hulu, Apple, and Alphabet’s (GOOGL) YouTube are gaining momentum in the space as consumers continue to switch from traditional cable TV bundles to online streaming platforms.

Walmart, AT&T’s (T) WarnerMedia, and the Walt Disney Company (DIS) are also planning to launch their video streaming services in 2019 to challenge Netflix’s dominance in the streaming market. Telecommunications and satellite operators AT&T and Dish Network, through DIRECTV Now and Sling TV, respectively, are already offering streaming services to offset their subscriber losses.

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