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Netflix won the streaming war, and everyone else is fighting for second place

Published Feb 20th, 2019 9:50AM EST
Netflix Shows
Image: AP/REX/Shutterstock

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Remember when cutting the cord was supposed to make our lives easier? Well, in a somewhat ironic turn of events, the popularity of streaming services today has reached a point where it’s nearly as much of a muddled mess as the complex cable packages of old. In addition to Netflix, you’ve got streaming options from the likes of Hulu, HBO, ESPN, Amazon, and of course, Apple in just a few months. And that’s to say nothing of additional streaming options from DirecTV Now and other similar services.

With the streaming landscape as competitive as ever, much of the conversation seems to focus on who can take on Netflix. The reality, though, is that Netflix has already won the streaming wars and everyone else is just playing for second place. Netflix currently boasts nearly 140 million subscribers worldwide. Hulu, by way of comparison, has upwards of 25 million.

Subscribers aside, the reach of Netflix affords it the ability to transform TV shows and movies into mainstream phenomenons. Over the past few months alone, we’ve seen this happen with movies like Bird Box and even with the recently released documentary on the ill-fated Fyre Festival. In short, Netflix controls the media landscape to a degree that we haven’t witnessed in years. When’s the last time, for instance, that we’ve seen a show outside of the Netflix umbrella become as popular as Stranger Things? The only show that comes to mind is HBO’s Game of Thrones, and that’s about to enter into its last season.

In light of that, former Paramount and Fox CEO Barry Diller sat down for an interesting interview with Kara Swisher on the Recode Decode podcast where he explained why companies like Apple simply can’t compete with what Netflix is doing.

“Netflix has won this game,” Diller said. “I mean, short of some existential event, it is Netflix’s. No one can get, I believe, to their level of subscribers, which gives them real dominance.”

And as for Apple’s upcoming foray into streaming, Diller isn’t all that impressed.

Well, they’re prancing around. They have their little feet in it. They’ve hired some people. They’re spending some money, but they do not have at least yet, although they’re going to announce something I think very soon or start their streaming service.

As a quick aside, Apple will reportedly reveal details about its nascent streaming service at a special event slated to take place in March.

Diller goes on to explain that even media companies with good programming won’t be able to keep pace with Netflix. Compounding matters is that Netflix, in stark contrast to, say, Apple, isn’t afraid to spend boatloads of money on the content it wants. Recall, Apple over the last 18 months has reportedly let some big name titles slip through its fingers because it opted to be a bit more frugal than Netflix.

What’s more, because of Netflix’s gargantuan and growing user base, Netflix can more easily justify spending big bucks on any particular program because it can put said program front and center and have it viewed by millions without any external promotion whatsoever.

“[Netflix] will outbid anyone because they have the platform to be able to do so, Diller explained. “That network effect circle.”

Diller even went so far as to say that companies chasing Netflix directly “are fools.”

Now that’s not to say that Netflix doesn’t have competition. Far from it. Over the past few years, both Hulu and Amazon have undoubtedly stepped up their games considerably. That notwithstanding, the simple truth is that a Hulu or Amazon subscription is — for many people — an add-on service whereas Netflix — for most people — has become something of a necessity.

With Netflix still keen on spending ever spare cent it has on pumping out original content, and given its already gargantuan lead from a subscriber perspective, there’s no scenario one can conjure up that would result in Netflix ceding its streaming lead to anyone.

Put simply, everyone else is playing for second place.

Yoni Heisler Contributing Writer

Yoni Heisler has been writing about Apple and the tech industry at large with over 15 years of experience. A life long expert Mac user and Apple expert, his writing has appeared in Edible Apple, Network World, MacLife, Macworld UK, and TUAW.

When not analyzing the latest happenings with Apple, Yoni enjoys catching Improv shows in Chicago, playing soccer, and cultivating new TV show addictions.