Amazon has finally managed to outdo Netflix. The price to pay for this victory was exorbitant

😍 2022-12-07 ​​12:00:25 – Paris/France.

The characters sing. Market research and consultancy firm Parks Associates has released research that, based on an estimate of subscribers throughout September 2022, Netflix is ​​not, for the first time since making the study, at number 1 on subscribers. These are conclusions that will be made public during the talks from December 12 to 14, but for now, this is the first starting point.

Changes in the landscape. We have been talking for some time about a hypothetical bursting of the bubble of Streaming. It is indisputable that whether there is a more or less apocalyptic collapse, or whether we are simply witnessing superficial changes, experts detect how patterns are changing. Jennifer Kent, vice president of Parks Associates, said the services are "introducing changes that transform the way users interact with platforms."

Not all of the changes Kent points to should be to consumer liking: for example, he talks about "a plan with Netflix ads to recoup subscribers who left it because of price", and he says that It's a good time to "track down these services, which are experiencing disruption and change." Without a doubt, the arrival of advertising not only on Netflix but on most platforms is one of the major game-changing changes we are going to see throughout 2023.

The Amazon Enigma. As we have commented on other occasions, Prime Video is not talking about subscribers to the platform, but about Amazon Prime customers. Counting like that, Prime Video has almost reached the number of Netflix subscribers (220 million users for the creators of 'Wednesday', 200 for the Amazon platform), but the figures correspond to subscribers to the Amazon Prime service, which offers free shipping among other benefits for virtual store customers.

Prime Video's actual user estimates so far have been around lower than Disney+'s (152 million) or HBO Max's (76,8 million), so it's possible the Parks Associates calculation is using the same yardstick. than Amazon, i.e. Amazon Prime users. It should not be forgotten that it is in e-commerce that the company records its greatest profits (nearly 500 million dollars in 000, as the company announced then).

It costs yours. However, it's no trifle to compete with Netflix. We have experienced moments of genuine fever to open our own exclusive content platforms. Disney+ and HBO Max are some of Netflix's most notorious competitors to try. However, voices are already beginning to be heard against this approach: John Malone, one of the main investors of Warner Bros. Discovery, asserted that we had to “be realistic. Everybody jumped on the gold rush diffusion video… It was a mistake. »

And there is a reason for this error: costs. Malone continues, “Everyone I know is looking closely at their content budgets going forward and trying to be more specific in terms of targeting, and not trying to have everything for everyone. Thus, we might see some specialization leading to segment or subset profitability sooner. Malone sees this as a situation for the American landscape, for example: "Disney's approach is (…) to have three or four Streaming that you can combine and try to satisfy more households. Netflix's philosophy right now is devastating, as Netflix co-CEO Ted Sarandos sums it up when he explains why the platform didn't get into live sports: "We're not anti- sports, we are pro-benefits. »

Warner, among the main affected. One of Malone's goals is to reconfigure Warner's business along these lines, to a more modest and appropriate size. An example from their accounts: HBO spent $2,5 billion in 2019 and made a comparable profit. In 2021, already engaged in this "gold rush", it spent 7 billion and lost 3 thousand. According to the executive, it does not make sense to multiply the expenses to match the huge production own Netflix, and at the same time to lower the price of subscriptions to be more competitive.

Amazon, tail. Amazon continues to play in another league. Not only its activity as a platform for Streaming is part of a much larger investment, but it doesn't mind spending and spending to catch up with Netflix. Bloomberg calculated a few months ago that Netflix had invested $13 million in its own production, well above its direct competitors Disney+ or Warner Bros. But Amazon has invested even more, 600 million. The expense comes from series as luxurious as 'The Lord of the Rings: The Rings of Power', but also from productions with significant costs such as 'The Boys', 'Outer Range' or 'The Wheel of Time'.

For now, and we come back to the Parks Associates studio, Amazon has rented it. Prime Video as a Service Streaming with more subscribers (than viewers) than Netflix is ​​a striking title, especially since Netflix has become, like Nintendo in the 80s, a brand symbol. If over there the Japanese were living room consoles, here Netflix is ​​platforms of Streaming. How much money does it take to reach this category?

SOURCE: Reviews News

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