The Streaming Wars Explained

The war of internet TV streamers has begun and will continue to escalate throughout 2020. Here are the major forces in that war:

Netflix

We all know the big dog. I’m amazed by how often I will mention a movie to someone and they’ll immediately ask “is it on Netflix?” It is the strongest player because it is the default.

Until recently Netflix has more or less owned this space because the only other service most people were aware of, Hulu, didn’t even compete with it directly (or at all outside of the US). Most studios were happy to license their content to Netflix because building their own streaming service was a huge technological mountain to climb. This new model cannibalized existing revenue (remember when buying entire seasons of a show on DVD was a thing?) but it was clearly the future.

Netflix went all-in on original content in 2013 which has proven prescient now that the gravy train of licensed content is shrinking.

In this new landscape they are pivoting from the one-stop-shop for your streaming needs to simply the streamer with the most stuff. If you can only afford one service, Netflix will always have more content than any one person can reasonably watch (and please don’t try, you need vitamin D) with programming across all genres. At this point they’ll try just about anything to see if it sticks to ensure that every time you open the Netflix app there’s something new to watch.

Disney+

It’s really the House of Mouse that escalated the streaming business into a war. Prior to 2019 Disney licensed much of its content to Netflix but was gradually investing in the platform (BAMTech) that would allow them to go its own way and not share revenue with a competitor.

Disney+ offers some of the most valuable franchises in a single package, but the size of that package is an order of magnitude smaller than that of Netflix.

Unless you’re a kid who loves Disney Channel TV shows, there’s just not enough content here to serve as your only content provider. Once your Star Wars and Marvel marathons are over, you’ll likely fall back to other sources. Disney thinks you’ll keep your subscription going because of big budget entries like The Mandalorian and The Falcon and the Winter Soldier, which tie directly into their respective film franchises.

Also keep in mind that Disney+ shows don’t get more adult than PG-13/TV-14, which brings us to…

Hulu

If you live in the US, until recently the streaming services were often referred to as “Netflix and Hulu.” Hulu was the join venture of the networks NBC, ABC and Fox (and others) who would post their new shows there the day after they aired.

Now Disney has full control of Hulu and it’s safe to assume that ABC (owned by Disney) will continue to publish new episodes of The Bachelor there, but NBC content will be pulled from the platform slowly over the next few years.

Hulu’s new purpose will be to showcase any Disney content not appropriate for the kiddos, particularly FX shows which are prestige, adult-oriented fare. Along with the pivot away from content from the US networks, Hulu will finally make a push internationally.

Amazon Prime Video

Amazon’s strategy with Prime Video seems to be similar to Netflix in that they license lots of existing content and supplement them with originals. Amazon sees Prime Video as a means of attracting consumers into the Prime ecosystem, not simply as a driver of revenue by itself.

I’m personally an example of the effectiveness of this strategy. I first signed up for Prime to watch Downton Abby, then when I realized that I could have a pencil sharpener delivered in two days, after that I was never going back to life without it.

Apple TV+

Apple is the other big tech company that decided to dip its toe in the streaming wars. Apple doesn’t see this market as a battle to be won or lost, but instead as an ecosystem that it wants to be in the center of.

The Apple TV app is a huge strategic initiative where that is intended to be your portal to all of the various services, with Apple taking a cut of each one. Apple TV+ content is an extra incentive to get you there.

Unlike Prime Video, TV+ doesn’t offer licensed content, just a slate of its own originals. Many of these originals are high-concept, big bets in an attempt to focus on quality over quantity which has been HBO’s strategy, at least until…

HBO Max

WarnerMedia is a massive media conglomerate that includes a variety of brands including the Warner Bros. (why don’t they just spell out “brothers?”) movie studio, the Warner Bros. TV studio, Turner cable channels (CNN, TBS, Cartoon Network), DC Comics, and HBO.

AT&T acquired WarnerMedia in order to use its various properties to enter the streaming wars, and to use the resulting product as an attractive bonus for AT&T subscribers. The new service, HBO Max (not to be confused with HBO Go and HBO Now, though I’m sure it will be), launches in May.

The prestige content of HBO will be the anchor of the new service, supplemented with the rest of Warner’s catalog which isn’t already encumbered with existing licensing deals (like the Harry Potter movies).

The result will be a hybrid of the Netflix and Disney+ strategies. HBO Max will have franchises (the DC Universe), big budget originals (Game of Thrones and its spinoffs, Westworld) and sitcom comfort food (Friends, The Big Bang Theory, The Fresh Prince of Bel-Air).

Peacock

Cord-cutting is an unstoppable trend. I don’t know anyone under age 30 who has cable, and the only people between 30 and 50 who have it are sports fans. Comcast bought NBCUniversal to protect itself from this trend and Peacock is the ultimate realization of that strategy.

Peacock’s launch catalog will include shows from NBC’s back catalog, Universal’s basic cable channels (USA, E!, Bravo), and Universal’s films. However much of that content has been licensed to others, and NBC’s new programming will still be available on Hulu for the next couple of years.

So from the start Peacock’s catalog seems weaker than its competitors, but over time some its content which is among the most popular on the other services; like The Office and Parks and Recreation for Netflix and Saturday Night Live for Hulu; will live on Peacock exclusively. Plus there will be big budget originals (including another Battlestar Galactica reboot) in the near future.

Peacock premieres widely on July 15th (after soft-launching to Comcast cable subscribers on April 15th) which was supposed to coincide with NBC’s coverage of the Olympics (Covid-19 ruins everything).

ViacomCBS “House of Brands”

CBS has been in this game since 2014, though I wasn’t really aware of it until 2017 when Star Trek: Discovery premiered. While the other networks consolidated behind Hulu, CBS launched CBS All Access for its own content.

Now that Viacom and CBS have remarried, ViacomCBS has decided to embrace the strategies of its competitors and merge their assets into a single service which launches later this year. That product has been referred to simply as House of Brands, but will get a less stupid before it premieres.

Star Trek fans can think of this as a merging of the Kelvin timeline from the last three films produced by Viacom’s Paramount Pictures into the Star Trek TV canon owned by CBS.

Apart from Star Trek and CBS’ network fare, House of Brands should eventually get Paramount’s Mission: Impossible and Transformers franchises as well as shows from Viacom’s cable channels Comedy Central, Nickelodeon, BET, and MTV. Showtime, which produces more prestige content, will be included at a higher subscription tier.

Who will win?

This isn’t a war that will end, but it will eventually reach an equilibrium. Perhaps all of the eight combatants I listed above persevere to some extent or perhaps a few will surrender and license their content to one of the victors.

Also winning will be measured differently for each service. Netflix and Disney+ will only derive revenue from subscriptions. Hulu, HBO Max, Peacock and ViacomCBS’ services will offer advertising at lower-priced or free tiers. Prime Video and TV+ are meant as ecosystem plays by Amazon and Apple, not necessarily profit centers in and of themselves.

Unlike traditional wars that result in property and collateral damage, this war will (hopefully) produce amazing television. Like traditional wars this one will be fascinating to watch if you’re a safe distance from the crossfire.