Boasting over 214 million subscribers, Netflix remains the undisputed leader among streamers. However, a recent GlobalData report predicts that content wars will continue to rage as Netflix comes under pressure from a growing list of competitors. Although the company held a 21% market share of the US subscription video on demand (SVoD) market in 2021, GlobalData predicts that this will fall to 16% by 2025 as alternative providers come to the fore.
Netflix is no longer the sure-fire winner
Netflix’s new subscriber growth showed signs of stagnation in the first half of 2021 due to a light spate of content following pandemic production problems. Although fresh content boosted subscriber numbers to 214 million in the third quarter, competitors saw strong growth throughout the entire year.
For example, Disney+ amassed 118 million subscribers by November 2021, just two years after its launch. Amazon Prime also gained ground on its competitors with Jeff Bezos claiming that 175 million subscribers had streamed content in the last year. Although there are some disparities in terms of subscriber accounting between platforms, it is clear that the next year will be characterized by increased competition.
Streamers will diversify their offerings
The trend of huge content spending will continue into 2022, with content portfolios becoming an important point of differentiation between different platforms. Franchises that are likely to attract a loyal fanbase stand to benefit in the next year as SVoD platforms try to entice new subscribers. This trend is already in motion with Amazon committing $1 billion to its Lord of the Rings series before a single episode has hit viewers’ screens.
SVoD giants are diversifying their content in more ways than one. The launch of Netflix Games in November 2021 and a co-streaming partnership with Twitch for select content is evidence of some of the ways this diversification will take place. The streaming world will see an increase in strategic partnerships between video streaming, gaming, and podcast companies. Although streamers will enjoy a more rounded entertainment service, many viewers will be torn between platforms.
An uphill battle for smaller streamers
Content portfolios will also be an important means of survival for streaming services facing tough competition. As more competitors arrive, platforms will have to provide evocative content, as well as find an effective niche within the SVoD market. And streaming services with smaller budgets will struggle to foot the bill for fan-favorite franchises. As a result, these companies will try to cater to increasingly niche audiences as a means of securing market share.
The launch of Paramount+ is a prime example of increasing specialization, with the platform aiming to serve the long-neglected Gen X audience with its content selection. However, companies that fail to secure a market niche will have a limited shelf life in the crowded SVoD market.
It is clear, that SVoD companies with smaller budgets will need to work hard to secure content that lures viewers in the next year. However, the bundling of smaller streaming services together as part of smart TVs (such as Sky Glass) will be a key tool as streamers opt for a single, integrated platform.
Ultimately, the next year will see content competition heighten in the SVoD market as platforms large and small feel the pressure to attract new subscribers to grow their revenues.