The streaming wars continue: a battle of content and services

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Photo Credit: Mel Westfall | Daily Texan Staff

Next year, Netflix, Amazon and Hulu will face their toughest battle yet as more streaming services rise to challenge their supremacy.

YouTube, Apple, Facebook and other platforms all appear poised to grab a share of their revenues and viewership in 2018. Cable television companies such as Time Warner and CBS currently offer subscription-based streaming platforms, and even Disney has announced that its own streaming service will arrive in 2019, providing exclusive access to “Star Wars” and Marvel features.

For cash-strapped college students, this means they have to make the difficult choice of selecting just a few platforms out of an oversaturated market. The question now is how will each of these platforms convince viewers that they are the place to be?

Radio-television-film professor Kathryn Fuller-Seeley advised producing high quality, critically-praised and exclusive content to attract new users. Fuller-Seeley said outspending the rivals is a good way to produce more superior shows.

“One way you compete is, ‘You’re going to spend $1 million an episode? Then I’m going to spend $2 million an episode,’” Fuller-Seeley said. “You get bigger stars, more elaborate scenery. Cost becomes a big selling point.”

According to Variety, Netflix spent $6 billion this year on its original shows, while Amazon spent $4.5 billion and Hulu spent $2.5 billion. Meanwhile, Apple and Facebook are planning to spend $1 billion on original content for their own streaming service.

However, increasing show budgets may lead to rising prices for subscription-based services, as shown by Netflix’s recent price increase to support its expanding library of original content.

Alisa Perren, a radio-television-film associate professor who specializes in television studies, said ad-supported services like Facebook Watch may attract viewers with free or cheaper offerings.

Perren also said prestige productions must be supplemented with shows that target viewers who don’t care about critical acclaim. These productions can range from sitcoms like “Fuller House” to reality programming.

“People tend to focus on the high-end stuff,” Perren said. “That’s clearly important for prestige and branding purposes. But it’s the (variety of shows) that really helps them out.”

Fuller-Seeley and Perren argued that platforms must not only focus on growing their viewership, but also on retaining their viewers by targeting their tastes. This will raise the likelihood of a user remaining within a platform’s ecosystem and generate more profits.

Fuller-Seeley said Netflix’s algorithms are an excellent customer retention strategy. The program recommends new shows to users based on what they’ve already watched, which is a good — and a slightly scary — way to keep viewers binging. Fuller-Seeley also pointed to Amazon, which uses information about viewer behavior to suggest products they may purchase, hooking users to their website.

“In a way, (the streaming services) are all about data,” Fuller-Seeley said. “Entertainment is just one small part.”

Both Fuller-Seeley and Perren predict the current climate of competing streaming services won’t last long — there are already too many platforms.

“Already, there are over 500 scripted shows available,” Fuller-Seeley said. “There’s too much content and not enough viewers for it. Some things are going to crash and consolidate.”

Because a crash appears likely, it may seem shortsighted to jump into the streaming wars against Netflix, Amazon and Hulu. But Thomas Schatz, the interim chairman of the radio-film-television department, said it’s still a good idea for these groups if they have a brand and a built-in audience.

“Those companies can afford it,” Schatz said. “It would be a mistake of them not to take a chance, as long as they find their niche.”