Apart from Amazon, other potentially dangerous players are Comcast, Verizon and Dish Network. They may be lagging right now, but they can pose a significant threat over the next few years. Comcast launched its Xfinity Streampix offering in February 2012, allowing subscribers to complement their existing pay-TV packages with the additional streaming service. The service is available at $4.99 per month, $3 less than what Netflix charges, and is therefore very competitively priced. Comcast stated during its Q2 2012 earnings announcement that it had doubled the titles available for streaming Streampix since the service’s launch. The company is clearly motivated to improve its streaming content as it is charging separately for it and wants to use it as one of the methods to stem pay-TV subscriber losses.
Dish Network offers the sling DVR technology to its subscribers allowing them to remotely access pay-TV programming. Adding Blockbuster streaming is an excellent move as it gives subscribers the flexibility to watch what they want, when they want and from wherever they want. The Blockbuster streaming service was launched in late 2011 and has helped Dish improve its subscriber trends. With the FCC granting Dish a waiver to build a wireless network, Dish will get more aggressive in promoting its streaming service by selling streaming devices that will work on its broadband network.
It is also interesting to note that the streaming services from Amazon, Comcast and Verizon-Redbox are priced cheaper than Netflix’s, which may be a concern as their content libraries develop. Lastly, let’s not forget the efforts from media companies themselves such as the joint venture Hulu as well as premium networks such as HBO.
We believe that Netflix is going to find itself surrounded with streaming behemoths in the near future, and this could pose a significant threat to its growth outlook.