Netflix, which once sent people film DVDs through the mail as its primary business, was the pioneer of streaming premium content. It started the changeover to streaming in 2007. Despite challenges from huge rivals, Netflix has kept its spot as the largest company in the industry based on total subscriptions.
First among the companies that have taken a run at Netflix is Amazon.com. It bundles its streaming service with its Prime subscription product, which also offers free shipping of goods bought at Amazon.com and special deals for its members.
The most successful of the recent streaming start-ups is Disney+. Less than two years old, it has 100 million subscribers and is projected to reach 230 million to 260 million by 2024. Much of this is expected to come from international expansion. Among Disney’s advantages is that it has the Disney studio library and all the movies from Marvel, Pixar and Star Wars.
The industry has two other relatively new heavyweights that want a piece of the industry. These are Apple, with its new Apple TV+ service, and AT&T with its HBO Max service.
Among the primary weapons all these streaming services have deployed is original content. Each makes full-length TV series and feature films that are exclusively available on their service. The aggregate costs to produce these have reached hundreds of millions of dollars a year.
Netflix just announced its first-quarter financial results. Revenue rose 24% from the same quarter a year ago to $7.2 billion. Net income rose from $709 million to $1.71 billion. Subscriptions rose very modestly to 207.64 million worldwide. Netflix generally compares this figure to the immediately prior quarter (the fourth quarter of 2020 in this case), when the number was 203.66 million.
Some analysts who follow Netflix say the slow rise is a sign that fewer people will watch streaming services in their homes when the pandemic ends. Some of these subscribers were “captive” because they could not go to movie theaters or socialize with friends and family. Is this true? Perhaps. However, 207.64 million is still a large number, and enough to keep Netflix in the lead.