Who is winning the streaming wars? How Netflix tallies against its rivals

Despite fewer new subscribers this year, the company continues to dominate the market

Jeremy Strong and Sasha Baron Cohen, in the foreground, in a scene from Netflix's 'The Trial of the Chicago 7'. AP

With the news last week that Netflix missed its new subscribers target by a third in the first quarter of this year – gaining four million new users rather than an estimated six million – you could be forgiven for thinking the game was up for the streaming platform.

Headlines screamed of “plunging” share prices and “dramatic slowdowns", and it appeared that the pandemic boom experienced by Netflix and its competitors was well and truly over.

But, first of all, Netflix's quarterly report reveals that it has not lost any subscribers. It added four million, taking its global total to about 208 million. That is not as much as the 16 million Netflix reported in the first quarter of 2020, but last year was an exceptional one, with global lockdowns driving new viewers to streaming services in a way never seen before. Over the whole of 2020, Netflix added an impressive 36 million new subscribers.

Even the most optimistic company executive wouldn't be expecting to repeat that feat this year – Netflix is anticipating only a modest one million new subscribers in the second quarter, with its latest forecast seemingly less influenced by the optimism of 2020.

In terms of its financial goals, Netflix says its revenue grew 24 per cent year-on-year in the same quarter, in line with expectations, despite the drop in subscriber growth.

Artistically, the company received an impressive 36 Oscar nominations this year and picked up seven Academy awards, more than any other streaming platform, distributor or studio. With 16 individual films nominated, it also leads the pack here, edging out Disney, which had 15 films in the running.

Objectively, then, Netflix chief Reed Hastings should not be shedding too many tears over the company's results. The end of the pandemic boom can certainly be blamed for some of the slowdown, but what other factors could be affecting the streaming platform's fortunes?

Increased domestic and global competition

Traditionally, Netflix has battled it out with Amazon Prime Video for top slot in the streaming wars.

Like Netflix, Amazon currently boasts more than 200 million subscribers, although since its video service comes wrapped in with its home shopping service, which has also experienced a huge leap in popularity during the pandemic, a like-for-like comparison isn't entirely applicable. With subscriber numbers in the double figures of millions, rivals such as HBO Max and Hulu trail significantly.

More recently, new players such as Disney+, a heavily revamped AppleTV+ and NBC Peacock have entered the market domestically and internationally, all competing for the same eyeballs as Netflix. Most significant of these is perhaps Disney+, which last month announced it acquired more than 100 million subscribers in barely a year.

However, subscribers alone don’t answer all our questions about which service is most successful. Amazon, for example, releases no data about how many of its 200 million subscribers are there only for the shopping.

Since all the companies are similarly coy about revealing much in the way of data breakdowns, we can perhaps look to data company Nielsen’s viewing figures to see how the rivals are faring, although they only cover US viewers.

Netflix still dominates the market. In terms of films, six of the top 10 most viewed for the week ending March 21 belong to Netflix, while Disney manages three and Amazon one. For original content, Netflix holds eight of the top 10 spots compared with Disney+'s two, while only Hulu is rated on the acquired content list with Law and Order joining nine Netflix titles.

This year, Warner Bros’s film slate will be released on HBO Max, simultaneously with cinema releases where possible, and the service is also set to launch internationally.

With Disney+ already well positioned only a year after launch, it could be these two traditional Hollywood brands that pose the greatest threat to the Netflix/Amazon global duopoly moving forward.

Increased regional competition

One of Netflix's big selling points has always been its global reach, and its commitment to providing original local content. Locally, this has included making shows such as Paranormal and Jinn.

It also brings Netflix into direct competition with regional players from outside the Hollywood bubble, most significantly in the Middle East with OSN, MBC Shahid and StarzPlay Arabia.

Among all the online platforms, StarzPlay Arabia, which is affiliated with, but independent from, the global Starz platform, is unusual in that it’s open to sharing data – perhaps in part because its figures are so impressive.

According to a September 2020 report from IHS Markit, the platform held top spot in the region for subscribers, ahead of even Netflix, with 29 per cent of the Middle East subscriber market. StarzPlay Arabia added an impressive 50 per cent to its subscriber base last year, reaching 1.85 million users.

StarzPlay Arabia chief commercial officer Danny Bates says this growth was driven largely by new sign-ups during the peak of restrictions, from March to May. He says over the first half of last year, the service experienced a 200 per cent growth in streaming hours compared to the previous year.

Bates admits that like the other platforms, the rapid growth has slowed since restrictions eased, though he says the figures remain healthy.

“We’ve not kept up those levels of growth year-on-year, but certainly what happened post-Covid is we soft-landed at a new high,” he says. “We can’t keep growing at the level we did because it was such a sharp peak, but what we’ve seen is a soft landing not far away from those peaks.”

Although Bates says the service’s most popular content is English-language action, drama and comedy, he says local content is another key part of attracting local audiences.

“We have a very strong line-up this Ramadan, and we produced our first original in 2020, Baghdad Central. We’re in the process in 2021 and 2022 of bringing even more Arabic original content to the platform, so it’s a key part of our strategy going forward.”

Similarly, MBC Shahid, the region’s leading streaming platform of Arabic content, with access to its parent company’s vast library, reports it doubled its subscriber base in the year to this April.

This is driven in part by new content including a record-breaking “over 40” new Ramadan titles, exclusive programmes such as live Formula One racing, and the launch of channels in Arabic and French from France’s M6 Group.

OSN has upped its Arabic content game in recent months, too, after a number of rebrands to its streaming service in recent years. It has doubled its investment in Arabic content with the aim of originals and acquisitions to make up 25 per cent of its output by the end of this year.

Separately, its deal to exclusively distribute Disney+ content in the region, where Disney has not launched its standalone service, should be a further enticement as the battle for subscriptions continues.

Whether Netflix hits its target for the second quarter or not, this fierce competition for viewers around the world means better and bigger productions are on the way.