Two years ago, the online video streaming services competed for volume of titles and over the same potential users. The dinner table discussion over “Netflix vs. Hulu vs. Amazon” focused on which service offered the most shows and best movies for the price point. This year, the conversation has changed as Netflix has publicly shifted the way they’re programming the service. Now with more subscribers than HBO and a successful $100 million original TV series, House of Cards, in their repertoire ($3.6 million per episode), the service has stated that their main competitor is now HBO, not iTunes, Hulu or other internet streaming services. Most recently Netflix allowed 1,800 titles to expire, telling Mashable that it is working towards licensing titles “on an exclusive basis” and that their goal is to be an “expert programmer” and not a “broad distributor.” This strategy paves the way for a future where Netflix can more easily co-exist with other subscription services.
Consumers were hoping an $8/mo subscription could replace their cable bill (just as a $10/month subscription provides them with access to virtually 100% of music available). Unfortunately for consumers, $8/month will always only give us a small subset of premium video content. The dust is starting to settle and each service is presenting its unique value to the viewer in the marketplace. Netflix will increasingly be the place to go for their exclusive series (next up this month: Arrested Development) and for recently released movies — the same value consumers see in HBO. Hulu (owned by the major networks) will be your go-to for network TV series, indie films, classics and documentaries (what Netflix used to be). I’d expect old seasons of TV series to fall off Netflix over time as Hulu increasingly takes over this role in the market. The sports leagues have their own subscription options and many others will enter the market and find their niche. Popular music subscription service, Spotify, will supposedly be entering the video streaming market. Amazon Prime has launched Amazon Studios to start producing original series for release through Amazon Prime.
So just how many of these services would you have to subscribe to in the future to replace your cable TV package? If you’re spending $120 on your cable bill, odds are $50 of that is for your internet and $70 is for your TV package. To replace your TV package you would have to subscribe to 7 or 8 services to match the current amount you spend on TV. If this is the future, then there is room in the market for Hulu to co-exist with Netflix and others, just as cable networks can co-exist and are not necessarily competing for the same viewer. If you’re looking to cut your monthly TV budget and you’re hoping (legal) internet streaming is the solution, then you’ll have to decide what types of movies and shows you’re willing to lose. It will become increasingly clear over the next year which services are right for you as they will inevitably follow the footsteps of TV networks and program their services for a selected viewer demographic rather than the masses.