Netflix and chill no more: Streaming is getting complicated

Disney and WarnerMedia are each launching own streaming services to challenge Netflix’s dominance

File photo by THE ASSOCIATED PRESS Another price hike is on the way for Netflix Canada subscribers as competition heats up among the biggest streaming video services. Netflix’s standard plan will now cost $3 more — or $13.99 a month — to watch content on two screens at a time.

Streaming TV may never again be as simple, or as affordable, as it is now.

Disney and WarnerMedia are each launching their own streaming services in 2019 in a challenge to Netflix’s dominance. Netflix viewers will no longer be able to watch hit movies such as “Black Panther” or “Moana,” which will soon reside on Disney’s subscription service. WarnerMedia, a unit of AT&T, will also soon have its own service to showcase its library of blockbuster films and HBO series.

Families will have to decide between paying more each month or losing access to some of their favourite dramas, comedies, musicals and action flicks.

“There’s definitely a lot of change coming,” said Paul Verna at eMarketer, a digital research company. “People will have more choices of what to stream, but at the same time the market is already fragmented and intimidating and it is only going to get more so.”

Media companies are seeking to capitalize on the popularity and profitability of streaming. But by fragmenting the market, they’re also narrowing the once wide selection that fueled the rise of internet-based video. About 55 per cent of U.S. households now subscribe to paid streaming video services, up from just 10 per cent in 2009, according to research firm Deloitte.

Just as Netflix, Hulu and Amazon Prime tempted people to “cut the cord” by cancelling traditional cable TV packages, the newer services are looking to dismember those more-inclusive options.

Disney Plus is set to launch late next year with new Marvel and Star Wars programming, along with its library of animated and live-action movies and shows. It hasn’t announced pricing yet, but Disney CEO Bob Iger said in an August call with analysts that it will likely be less than Netflix, which runs $8 to $14 a month, since its library will be smaller.

AT&T plans a three-tier offering from WarnerMedia, with a slate of new and library content centred around the existing HBO streaming app. No word on pricing yet.

CAPTAIN COMICS: Top 20 comics, sci-fi, horror and animation movies of 2019

READ MORE: ‘Please do not hurt yourselves with the Bird Box Challenge,’ Netflix says

Individual channels, such as Fox, ESPN, CBS and Showtime, are also getting into the act. Research group TDG predicts that every major TV network will launch a direct-to-consumer streaming service in the next five years.

Netflix and others have invested heavily in original movies and TV shows to keep their customers loyal. Netflix, for instance, said Wednesday that 45 million subscriber accounts worldwide watched the Sandra Bullock thriller “Bird Box” during its first seven days on the service, the biggest first-week success of any movie made for the company’s nearly 12-year-old streaming service.

That first-week audience means nearly a third of Netflix’s 137 million subscribers watched the movie from Dec. 21 through Dec. 27 — a holiday-season stretch when many people aren’t working and have more free time.

But Netflix, Hulu and others may soon have to do without programs and movies licensed from their soon-to-be rivals. In December, Netflix paid a reported $100 million to continue licensing “Friends” from WarnerMedia.

Why are media companies looking to get in? Data and dollars. Sure, they get money when they sell their programs to other services like Netflix. But starting their own service allows networks and studios access to valuable data about who is binging on their shows.

For services with ad-based options, that data translates into more dollars from advertisers. And services that rely only on subscription revenues, media companies can use the data to better tailor their offerings for individual tastes, helping to draw in more subscribers.

“I think all media companies are coming to grips with the reality that you better establish a relationship directly with your audiences,” said AT&T CEO Randall Stephenson at an analyst conference earlier this month.

The business model that some networks and content companies are currently using, distributing their TV shows and movies only by licensing them to streaming platforms, is getting “disrupted aggressively” as more companies launch their own services, said Stephenson, whose company acquired WarnerMedia in June.

Forrester analyst Jim Nail compares this moment to the “Cambrian explosion,” a historic era when plant and animal species rapidly multiplied after Ice Age glaciers receded.

“Big brands like Disney have to evaluate: Are we only going to access this market by licensing our content to Netflix, Hulu and others?” he said. “Or, can we go direct to the consumer with our own service?”

But a multiplicity of streaming services could easily overwhelm or confuse consumers. To get a full slate of programming, TV watchers may soon have to subscribe to several services instead of just one or two.

Among those options will be services like Netflix and Hulu that offer a wide range of video from a variety of sources; cable-like “skinny bundles” such as FuboTV, Sling and YouTube TV that offer a variety of live channels; and channel- or network-specific services like Disney Plus.

Consider just AT&T’s plan to launch a three-tiered service this year centred on HBO. An entry-level bundle will offer mostly movies; a second, slightly more expensive tier will include original programming and newer movies. A third and still more expensive offering would add more WarnerMedia entertainment such as “Friends.”

The cost of multiple streaming services could quickly approach the average cost of a cable bill — not counting the cost of internet service. That’s around $107 per month, according to Leichtman Research Group.

“It’s unlikely any of the services individually can charge more than $10 per month,” Forrester’s Nail said. “The great unknown is how many individual streaming services people are willing to sign up for.”

Companies are already trying to tame this chaos by bundling multiple streaming services together. Amazon Prime customers can add-on subscriptions to HBO, Showtime or Starz. Roku and Chromecast viewers can access their different services from a central place; Roku said Wednesday it will start selling in-app access to Showtime, Starz and other channels as well.

How should consumers deal with all the coming change?

“Be patient,” said Michael Greeson, president of research group TDG. “We’re in a time of dramatic change for the TV and video business. There’ll be great benefits, and question marks and consequences.”

Mae Anderson, The Associated Press

Like us on Facebook and follow us on Twitter.

Just Posted

Province announces more improvements for Highway 14

$85-million project made possible through federal funding support

Wild Wise Sooke founder leaves post

Lush Cosmetics offers much-needed funding for the group

UVic partners with harm reduction groups to run a drug checking pilot project

The three-year pilot will allow people to test their drugs for fatal ingredients like fentanyl

Public asked to give feedback on proposed protection measures for southern resident orcas

Measures focus on key threats related to contaminants, lack of prey, noise or physical disturbance

UPDATED: Police say Happy Valley shooting and crash is ‘isolated and targeted’ incident

One person in custody, another fled following crash on Kelly Road

What’s age got to do with it? B.C. couple with 45-year gap talks happy marriage

An Armstrong couple that has 45-year age gap began turning heads after being featured on show Extreme Love.

Music Monday to unite students across Sooke in song

Over 200 students will carol around town on May 6

B.C. men challenge constitutionality of Canada’s secret no-fly list

Parvkar Singh Dulai says he received a “denial of boarding” notification under the no-fly program last May 17

Murder on B.C. property didn’t need to be disclosed before sale, court rules

Buyer had tried to break contract after learning a man with ties to crime had been murdered there

POLL: Do you think the Notre Dame Cathedral in Paris should be rebuilt?

Images of one of the word’s most iconic landmarks were seared into… Continue reading

B.C.’s largest Vaisakhi festival target of threatening Facebook post: Surrey RCMP

Police say they are investigating the posts on Facebook, after local MLA forwarded screenshots

Pug life: B.C. town boasts waggish list of dog names

Freedom-of-information request lists most ‘pupular’ dog names registered in White Rock

VIDEO: Duncan-Nanaimo’s Funkanometry bow out of ‘World of Dance’ with ‘After Hours’ routine

Judges praised them as entertainers, and urged them to work a bit more on their dancing

Most Read