Netflix’s World Vision

Is Netflix starting to feel the heat from its new competitors? Does its subscriber slowdown signal the end of “Covid winner” stocks? With so much currently riding on direct-to-consumer entertainment, the streaming giant’s first-quarter earnings report, published on Tuesday, was essentially one enormous Rorschach test for analysts and business reporters. Their myopic obsession with raw subscription growth in the U.S., as opposed to subscription economics on a global basis, reveals more about their bias than it does about Netflix, whose most profitable days may still be ahead as it now chases 800 million customers on the back of local content production.

New King On The Block

Amazon has finally come out of Netflix’s shadows. Its number of global customers now matches Netflix’s worldwide subscriber total. It carries the crown for the most watched film in the pandemic era, Coming 2 America. And now the e-commerce giant is outspending Peter Jackson to produce the first season of its Lord Of The Rings adaptation for $465 million. As with Apple and Netflix, the economic logic behind Amazon’s video dealmaking sums defies traditional profit-and-loss considerations—and provides more fuel to lawmakers demanding all manner of market restraints. But good luck with that: the lack of transparency surrounding these streaming empires means would-be trustbusters are just stamping their feet in the dark.

The Undead: Blockbuster Movies

Netflix’s billion-dollar-plus agreement to secure the domestic “pay one” window on five year’s worth of upcoming theatrical titles from Sony Pictures — including one revolving around Marvel’s vampire character Morbius —highlights the value for blockbusting content in the streaming wars. Their value might actually increase: most industry-watchers now expect a global post-pandemic shakedown as households rationalise their subscriptions and start deciding between competing streams of Hollywood tentpoles.

Das Reboot

Now that every American movie from Alien to Zootopia has clinched its own spinoff TV project, content-ravenous streaming services are increasingly turning their attention to updating and reformatting iconic and sometimes unlikely European films. Indeed, such is the frenzy for fresh content with an established fanbase, or proven story elements, that Europe’s leading show runners are starting to contemplate spinoffs for projects that have not yet even reached their conclusions.

Enmity In Paris

As French filmmakers go to the barricades over the continued shutdown of movie-houses, their industry stands to gain from an imminent law obliging streaming platforms to invest in French content. How much they will benefit is a source of contention. France’s National Centre for Cinema (CNC) claims that the quota will generate approximately €200-€250 million per year in the short term, at least 20% of which would go into filmmaking. Filmmakers say the amount could be as little as €18 million a year in the case of Netflix.

Targeting India

India is a tantalising prospect for U.S. streamers, all of them salivating over the potential of an online video market already estimated to be worth $1.41 billion—equivalent to a dollar per person. And yet the passage to India has proved tricky. Netflix, for example, has just announced its biggest film & TV investment to date in India just as competition is raging among global streamers to unlock the country’s vast potential—and its authorities are clamping down hard on SVOD content.

A League Of Their Own

Streaming services ranging from tech giant Amazon Prime to the fledgling “Netflix of sport” DAZN are all looking to score the rights to some of Europe’s biggest sport fixtures as traditional broadcasters and pay-TV outfits continue to buckle from disruptions caused by the pandemic. The net gains from such aggressive bidding have already been seen in increased subscriber numbers and accelerated cord-cutting.

Europe’s VOD Appetite Soars

Europe’s enthusiasm for streaming entertainment is fuelling colossal growth in VOD services, which last year hauled in revenues of €11.6 billion ($14 billion) across the 27 EU member countries plus the UK. That compares to just €388.8 million ($468 million) a decade ago, according to a new report by the European Audiovisual Observatory, a jump that equates to a compound annual growth rate of 40%. Encouragingly for Europe, local SVOD players have also made a significant impact on a regional level.

Drawing Battles Lines

Godzilla Vs Kong isn’t the only clash between Japanese and US heavyweights this year. As entertainment giants pump up their distribution pipelines for content-hungry global audiences, freshly resurgent Sony Corp. is squaring up to Netflix and others in the battle for the $24 billion-a-year anime market where it has just enjoyed record-breaking box office success with Demon Slayer. But big as anime is in Japan, its revenues are expected to be even greater overseas as a result of demand from global streaming platforms.

Blurred Lines

As the Hollywood studio conglomerates shift their focus to their SVOD platforms, they are increasingly developing spinoffs, companion series, reboots and even animated versions of big budget theatrical films in a bid to attract new streaming customers – and fight the challenge of subscription churn. With so much overlap, those cinematic universes are not quite so cinema-centric after all.