Dec 30, 2023 | Streaming

A bar graph for the breast cancer rates among women of different ethnicities.

The Streaming Wars Are Done — With Netflix Coming Out On Top

Netflix has officially won the race to grab subscribers, putting an end to the streaming wars. | Illustration: Bing AI / Pale Magazine

Under immense pressure to make their streaming businesses profitable, networks are once again turning to Netflix even as they look to compete with the streaming giant — all but confirming that the “streaming wars” are done, with Netflix emerging as the clear winner.

Disney CEO Bob Iger once compared companies’ licensing deals with Netflix to “selling nuclear weapons technology” to a powerful nation. However, the streamer has since given in to a load of debt — striking a licensing deal with Netflix earlier this year that will reportedly give Netflix access to shows like “Grey’s Anatomy” and “How I Met Your Mother.” The deal does make sense: studios can license their shows to Netflix, and eventually reacquire them once they’ve suddenly become hits.

“Netflix’s algorithm is a hit-making machine, with its internal word-of-mouth driving virtually anything to success”

Acquisitions have always been a vital backbone of Netflix’s strategy, with “Friends” and “The Office” regularly being among the streamer’s most-watched shows. With its nearly 250 million global subscribers, Netflix is the most valuable real estate in Hollywood. The stunning success of “Suits” on the platform this year showed how the company can be a hit-making machine, and how its internal word-of-mouth can drive an influx of viewers to almost anything.

The company’s recent engagement report revealed how nearly half of the viewing time on the service was spent on licensed content. Even though some of the year’s biggest shows — the likes of “Succession” and “The Last of Us” — were found on alternative streaming services, Netflix’s algorithm came out on top.

Netflix’s co-CEO (then COO) Ted Sarandos famously said how the streamer’s goal “is to become HBO faster than HBO can become us” — which eventually led to a frenzy among networks scrambling for global streaming dominance. In November 2019, the Mouse House debuted Disney Plus, kicking off the so-called streaming wars that have quickly led to the creation of multiple streaming services: HBO Max (now Max), Paramount Plus, and Peacock. Others like Apple TV Plus took an approach similar to HBO, releasing a limited yet curated selection of high-budget shows.

“Many of these services experienced explosive growth by lowballing their subscription costs”

The streamers began a cycle of huge investments to gain consumers’ attention, having them sign up or switch services. Ambitious projects became a necessity to attract new subscribers. Last year, Netflix lost subscribers for the first time in over a decade while other services experienced some growth. Disney Plus quickly emerged as Netflix’s biggest adversary, and it seemed like there’s never been a better time to be the consumer.

Many of these services experienced explosive growth by lowballing their monthly subscription rates, generating hundreds of millions of dollars in operational losses to gain a share of subscribers. Apple TV Plus was free if you bought any Apple device, Disney Plus was available for just $4 a month, and you could share your Netflix account with as many people as you like. The days are so no more.

Many streaming services have since raised their prices, introduced entry-level plans that include ads, and taken measures to crack down on password sharing. The industry predicted disruption which could be nightmarish for Netflix — the big daddy of streaming services — but the streamer has proven how programming is just part of the game.

Pedro Pascal and Bella Ramsey in HBO's The Last of Us.

Netflix is slowly but surely building upon its investments to become a viable gaming service, recently adding multiple Grand Theft Auto titles to its catalog. | Image: Netflix

The streamer defied expectations in 2023 as it netted 14.7 million added subscribers across Q2 and Q3 of 2023, and is also expected to see continued growth across its ad-supported tier. There was also a shortage of original programming to watch on Netflix this summer, but the streamer is expected to recover by 2024 — fueling further growth. The only question that remains is: What’s next for Netflix?

Ads are creeping onto streaming services, and the gap between premium and ad-supported tiers is widening. Netflix (and other streamers) want to get the most out of their existing subscribers, which could mean a live sports package and even streaming games on your TV and mobile. While initially relying on “sports-adjacent programming” that taps into the company’s strength in documentaries, Netflix has already begun experimenting with live sports events.

On the gaming front, the company’s slowly but steadily building a curated collection of successful indie titles and past hits. It has already built two in-house game studios and acquired four others and has nearly 90 titles in development. While engagement with games is still in its single digits, Netflix is steadily diversifying its revenue streams — all while the competition takes notes. ❑