Yes! The monopoly of Netflix might end real soon. How! Do you believe in the philosophy of History Repeats Itself! So, here’s the flashback to the history…
Remember Orkut, the social media giant by Google! If yes, then you might also remember how they created a huge monopoly for several years with over 27 million users around the globe. But Mark Zuckerberg changed the game with Facebook. And now we can see what a bang on move it was for social networking sites. With time, Orkut disappeared from the market and over time other social media platforms came into existence and won over audience such as Instagram, Twitter, SnapChat, and so on.
Well, the justification behind this long introduction is that the digital world is expanding every day. Technology is available everywhere, with everyone. And the popularity of OTT industry has made everyone aware. In this situation, creating a monopoly for the long run can be considered as a myth. And so, our prediction says that Netflix may experience a decline from its current position in the video streaming market.
Here are a few observations that strongly suggest that Netflix’s dominance is not impenetrable:
The Crowd follows Netflix, but only to alienate it
This is the biggest issue that Netflix is going to face in 2019. The major media players, such as Disney, NBC Universal, Warner Media, IMDb etc, will be launching their own video streaming channels, later this year. Though Netflix has an envious list of original contents, it also has a huge library of movies from big production houses as well. So, when these production houses will launch their own VoD services, they will either remove contents from Netflix or will charge more to stream them on the channel. In that case, Netflix will have to invest more on original content something it has already started doing by investing $10 billion on creating Netflix originals or increase the subscription price which might have its own share of repercussions especially when other streaming services have been comparatively cheaper. This brings us to our next observation.
Netflix’s Subscription Rate: Can it swim against the tide?
The subscription plans of Netflix have always been higher than most of the streaming services. And recently, this price has increased even more. The basic plan costs $9, the standard plan comes for $13, and the premium plan has a value of $16.
Now the higher price is understandable as everybody is aware of the streaming giant’s gigantic investment on original content and so as the debt it is carrying on its head. The explosive growth of Netflix, if not a torchbearer, but it did compel the likes of Warner Bros, Disney, AT&T etc. to respond. But these names already have an impressive content library, are veteran in the media & entertainment industry and have an insane amount of money to back their move.
Netflix, on the other hand, is carrying a debt worth $10 billion. So far Netflix is unfazed, but with big shots gradually foraying into OTT space, Netflix may find itself on a road that is both bumpy and taxable too.
Having said this all, one can say that Netflix has certainly set a benchmark for the OTT industry. To be very honest, perhaps every video streaming services look up to Netflix, be it for design, for UX and everything related. But change is the only constant and digital media landscape adopt changes faster than any industry. With a completely ad-free model and exorbitant subscription rate, only time will tell if Netflix can sustain the pressure coming from in and around. And the result won’t take much time to come out.
This blog was first published on LinkedIn Pulse! Check it out here!