Advanced Television

Analyst: Netflix to face increasing US competition

October 9, 2013

Analyst firm TDG has released The Challenges of a Maturing Netflix, a new white paper that features TDG’s analysis on the growth of Netflix from inception through Q2 2013, and discusses the critical industry and consumer dynamics that will shape its future, as well as how Netflix and other OTT TV and movie services can best respond to this rapidly changing market space.

“It is remarkable that an OTT streaming service that first came to market in 2007 could, six years later, claim an Emmy, 30 million domestic streaming subscribers, and a rapidly growing international streaming business,” notes Bill Niemeyer, TDG Senior Analyst and author.

The new paper reviews key milestones during this six-year history, including the Qwikster debacle in 2011 that generated deep concern among investors and customers alike. “Apart from Qwikster, Netflix has a long history of first-rate execution,” says Niemeyer, “In the two years since that episode, the company has focused efforts on building its content library, creating original content, and improving the quality of customer experience. As a result, total domestic Netflix streaming subscriptions are up almost 40 per cent.

That said, Niemeyer notes Netflix will face increasing competition in the US from online enterprises including Amazon, Google, and Hulu, as well as the TV Everywhere efforts of television networks and multichannel operators. Consequently, the space is set for intense competition over the next five to ten years.

“Would-be competitors will need to do as Netflix has done: spend the considerable money it takes to acquire quality content, move forward with good strategy, and offer a high-quality consumer search/discovery and viewing experience,” he advises.

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