When people think of internet video streaming services, Netflix often comes to mind first—and with good reason. For several years it has been the dominant player in the market, but growing competition from well-funded rivals is reshaping the industry. As broadband speeds reach new highs, an increasing number of viewers are turning to streaming services for their entertainment.
Netflix’s rise has been driven in large part by bold investments in original programming like House of Cards and Orange Is the New Black, both of which received Emmy nominations. The California-based company is widely credited with changing American viewing habits and popularizing “binge-watching.” Its success has drawn attention from pay-TV operators, cable providers, and broadcast networks that now want a piece of the video streaming market.
HBO
HBO has emerged as one of Netflix’s most significant competitors. The premium network announced plans to launch a standalone streaming service, expected to debut in 2015. HBO’s long-standing model—funding high-quality original series alongside licensed content—helped inspire parts of Netflix’s strategy. With hits like Game of Thrones, HBO is well positioned to attract a substantial audience for a direct-to-consumer streaming offering. At the time of the announcement, HBO had not disclosed pricing for the new service.
Video On Demand
Many cable providers have offered Video On Demand (VOD) for years, giving viewers flexibility to watch shows and movies when it suits them. However, traditional VOD has generally not invested in the type of exclusive original content that services like Netflix, HBO, and Amazon produce. That gap may be a factor in why internet-only subscription growth is outpacing cable in some markets. Although VOD lacks the mobility of standalone streaming apps—viewers typically still watch on their television—it provides the schedule flexibility many consumers want.
Sony
Sony announced a streaming offering called Video Unlimited that aims to deliver dozens of channels and licensed content to subscribers, including programming from major partners like CBS. The service is planned to work on PlayStation consoles and as a standalone player. Reports suggested a subscription price around $80 per month, a level that could limit its appeal to price-sensitive customers despite the strength of Sony’s content lineup.
Rupert Murdoch
At a recent technology conference, Rupert Murdoch, chairman of 21st Century Fox, argued that the media industry should collaborate to build a competitive alternative to Netflix. Companies like Disney and NBCUniversal partnered to create Hulu, which offers current and past episodes of network shows, demonstrating how content owners can band together to reach consumers directly.
A consortium of media companies that control both content creation and distribution could present a formidable challenge to independent streamers. By combining popular programming with their own distribution platforms, these media conglomerates have the potential to become dominant players in streaming.
Amazon
Amazon has quietly become a major force in video streaming. Its Prime Video service lets subscribers stream tens of thousands of titles and has moved into original programming with series such as Alpha House. While Netflix and HBO have earned much of the media spotlight, Amazon has steadily built a competitive streaming service. One distinction is that Prime Video is bundled with Amazon Prime membership, rather than being offered as a fully separate stand-alone subscription in many markets.
Despite growing competition, Netflix still leads in terms of total catalog size and the prominence of its original shows. The company invests heavily in programming—spending a significant portion of its revenue on content—and that commitment may increase as competition intensifies. Netflix has faced public scrutiny over price increases in the past, and the central questions for the company going forward are whether it can maintain market share, sustain profitability, and continue offering compelling service at a price consumers find acceptable.