Rough waters for Streaming Services

It’s always nice to be proved right, even if in the case of VOD giant Netflix there is a certain sense of schadenfreude about it.

As long ago as 2012, I found myself questioning exactly how the likes of Netflix could continue to grow their audiences at the levels required to produce a show such as then-launching House of Cards: irrefutably first-rate, undeniably expensive at $50m per season.

So I was unsurprised and just a little self-congratulatory to hear that Netflix had missed its target of 3.69m new users in July – September, and that this 19% underdelivery decimated the company’s share price by 25%. Surely it was obvious that such growth was impossible? Surely this would put off others from trying the same tact? Not in the near future. HBO have very recently announced that they are launching their own competing service. Why? Well, because whilst I may have been right in the short term, in five years this post may leave me with on-demand egg on my face. Streaming is set to rise, if not at the exponential rate gambled on by Netflix.

So what is my next prediction? I can only see that a collaborative effort between these corporations, or aggregator service, can be successful moving forward. Who will be behind this? I would keep an eye on BSkyB, who in the quarter to September secured over 300,000 new sign ups to its Sky Go service. The idiom ‘embarrassment of riches’ is far, far older than the television set. We may have a seemingly infinite choice when it comes to content, but perhaps TV promotion (and subsequent recommendations from those mavens who watch content when initially broadcast) will continue to shape our final choice.

If this is not the case, get ready for a price war between the subscription services as they clamour for continued custom.

Sources:
http://www.theguardian.com/media/2014/oct/15/netflix-share-price-falls-subscribers
http://www.theguardian.com/media/2014/oct/16/bskyb-sky-go-first-quarter-results