While Netflix remains the undisputed leading streaming platform, with a 21% share of the US subscription video on demand market in 2021, research firm GlobalData noted that the giant is showing signs of slowing. With more and more competitors arriving, streaming platforms will not only have to provide evocative content but will either have to find an effective niche or build partnerships with other entertainment providers to become an entertainment all-rounder and stand out in the crowd, GlobalData said.
“We have already started to see Netflix branching out to different areas, with the launch of Netflix Games in November 2021 and a co-streaming partnership with Twitch. Reaching different audiences will continue to be a key strategy. I wouldn’t be surprised if the company looked to experiment with more gaming streaming platforms in the future,” commented Francesca Gregory, Associate Analyst at GlobalData.
Netflix experienced a slow start to 2021, following a light slate of content as pandemic production problems came to the fore. Although fresh content in its third quarter boosted subscribers to 214 million, competing platforms are experiencing explosive growth: Disney+ amassed 118 million subscribers by November 2021, just two years after its launch. Amazon Prime Video announced that 175 million subscribers had streamed content last year.
“As the number of streaming platforms increases, and the market approaches peak fragmentation, SVOD platforms will use content portfolios to differentiate themselves. The trend of huge content spending will continue, with franchises that are likely to attract a loyal fanbase standing to benefit in the next year,” Gregory noted.
This trend is already in motion with Amazon committing US$1 billion on its “Lord of the Rings” series before it even premiered. Meanwhile, SVOD services with smaller budgets will target niche audiences. Paramount+, for example, will aim to serve the long-neglected Gen X audience with its content selection.
“The ‘all you can eat’ business model has proven popular with streamers so far. However, this means that to grow revenues, streaming platforms will need to seek new audiences. A series of strategic partnerships between video streaming, gaming, and podcast companies will take place. The launch of Netflix Games in November 2021 and a co-streaming partnership with Twitch for select content are evidence of some of the ways this diversification will take place,” Gregory concluded.
The ‘all you can eat’ business model has proven popular with streamers so far. However, this means that to grow revenues, streaming platforms will need to seek new audiences” Francesca Gregory Associate Analyst at GlobalData