The success of streaming platforms has allowed the world to have quick access to movies and TV shows from different countries, in addition to content in different languages, with the ability to view such content with the help subtitles that can range from English to Russian, depending on the native language of the audience. Streaming platforms have come to be synonymous with both quality and quantity. In contrast to this range, the traditional film industry has far less variety to offer, and movies that launch in cinemas have large production costs in addition to the constraints of a theatre.
Streaming platforms on the other hand have a more diverse mass audience base, since the home or any other space of convenience becomes the theatre. This is future elevated with the affordable pricing offered by subscription streaming services for the ability to consume unlimited content at any time of the day, over the price of one movie ticket for a limited time of entertainment.
Does the rise of streaming platforms spell the decline of the traditional cinema experience? Experts predict that cinemas will exist but will not become the sole platform to consume new movies. Rather, cinemas will still have their place as venues for refined entertainment. The popularity of streaming platforms might open a large population of people into being receptive to consuming a movie in a traditional movie theatre, rather than in the privacy of their own spaces.
Subscription-type streaming services gained increased popularity due to their comparative affordability in comparison with their more traditional counterparts: DVD rental services and cinemas. What is more, while choosing the movie the traditional way the consumers are largely dependent on others’ opinions—be it reviews or recommendations by their friends or staff—some streaming platforms offer sophisticated recommendation algorithms. This phenomenon is especially striking on Netflix, which developed its algorithm with the help of hugely successful online competitions dating back to the year 2006, when Netflix was still an online DVD rental platform.
The recommendation algorithms, while often successful, are not foolproof. It is quite a widespread problem that the moment one watches a series or a movie differing from one’s usual preferences, the algorithm stubbornly keeps recommending positions linked with this single outlier. This problematic nature of algorithmic recommendations gave rise to streaming-aimed lists of recommended positions—British The Guardian has a monthly position “What’s on Netflix and Amazon this month”, and American review-aggregation service Rotten Tomatoes has “Streaming Binge Guide”, aimed likewise at streaming platforms.
The popularity of streaming has dramatically altered the way customers approach watching series. Unlike TV shows, series available on most streaming platforms release a number of episodes simultaneously, leading to development of the phenomenon of binge-watching or marathon-viewing, when a consumer watches a number of episodes of a show in a single sitting. This behaviour, while relatively non-problematic when indulged in reasonable manner, has led to some disturbing developments, as some claim binge-watching is often associated with anxiety and depression. Disney+ streaming platform abandoned the now-common practice of releasing the entire seasons in one go, opting instead for the more traditional (outside the world of streaming) solution of releasing one episode per week. Depending on the success of this platform, other streaming services might switch to a similar model.
Netflix began in 1997 as a DVD renting platform, and launched its streaming format in 2007 with a 7.4 million subscriber base. This jumped to a 167 million subscriber base worldwide in 2019. Netflix produced its first show “House of Cards” in 2013. The platform showed a revenue of $20.16 billion for 2019.
Amazon has been in the streaming game since 2006, as Amazon Unbox in the United States. In 2016 they added the Prime Video membership onto their diverse portfolio of services. Amazon had 150 million Prime subscribers globally in 2019. While Netflix has a cap on its spending based on its subscriber base, Amazon spending cap is not based on its subscriber base, which allows it to shell out billions to make original series and buy movies. Amazon also owns its own hosting infrastructure, while Netflix rents the infrastructure, thus raising costs. Amazon pulled in $1.7 billion in revenues for 2019, which is projected to double in 2020.
Hulu launched its streaming services in 2010 and boasted of 30.4 million subscribers in 2019. The platform earned $700 million in ad revenues and $1.3 billion in subscriber revenues in 2019. Hulu credits its success to being owned by a handful of studios, with Disney being the majority owner.
Disney+, which launched in November of 2019, has 28.6 million subscribers, and is not yet available globally. Disney has a huge vault of content that will sustain its rise. Disney+ showed a revenue of $50 million in its first 30 days of the initial launch. The new revenue projections are yet to be released. Apple TV+ entered the streaming market in November 2019. Apple will offer original content as well as a channel-like interface. Its revenue projections are not yet published.
The film industry can grow well alongside the expansion of digital streaming giants, if Hollywood changes its business model to emulate the rapid output characteristic to the digital streaming platforms. The Netflix subscription model and its investment in mass appealing original shows marked a cornerstone in standards within the modern digital streaming media industry. But this might soon be topped by Amazon, investing in content that is local to different countries in different languages. This is in addition to the fact that Amazon has so many profitable business portfolios and the ability to pull in more investment than a media company like Netflix.
In the long run, capturing a mass diverse subscriber base, with content in many languages, is bound to be a more profitable model over solely catering to an English audience base. Netflix is also diversifying its content in terms of language and tailoring content from different countries to appeal to local and global audiences. The success of shows like Netflix’s “Narcos” is rather indicative of this trend. Disney+ is relatively new and its rise is yet to be charted in terms of its growth model and position within other streaming platforms.