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Tue, 12 Nov 2019 11:59 GMT

New Walmart, AT&T Streaming Platforms Face Uphill Battle Against Netflix, Amazon

Science & Technology

7Dnews London

Fri, 12 Oct 2018 16:29 GMT

Announcements made this week by Walmart and AT&T about their new streaming video platforms make one thing certain - the video streaming stage is about to get crowded.

Walmart’s plans for a video-on-demand service, Vudu, have been public for several months and this week the retail giant announced plans to partner MGM Studios on original shows. Earlier in the week, AT&T's WarnerMedia said it would create its own streaming service centred on HBO and Turner properties. Meanwhile, Disney is in the process of completing its purchase of Fox's entertainment businesses to beef up its planned streaming service, which will debut next year.

These high-profile brands enter a streaming market that is still growing, although at a slower pace. EMarketer expects the number of people who use one or more video services in the US to grow by about 4% to 206 million by 2020, as reported by the AP. Google's YouTube and Netflix are the clear winners so far. YouTube has an estimated 191 million users and Netflix about 133 million, according to eMarketer. Amazon has been nipping at Netflix’s heels, with an estimated 90 million.

In addition to those services are others that are popular in particular countries, such as the BBC’s iPlayer, Sky Go, and ITV in the UK and Hulu in the US and Japan. Other lesser-known services, such as FilmStruck, Sundance Now, Mubi and others offer older movies or niche offerings to subscribers.

But as the number of separate streaming services increases, streaming services themselves face a hard question. Will consumers will be willing to fork out money for yet another streaming platform? Streaming behemoths like Netflix and Amazon got an early start and have benefited from the lion's share of subscribers so far. 

"Too many services (are) going after the same consumer and piece of the pie," Wedbush analyst Dan Ives said. "Streaming represents a significant market opportunity for the coming years but ultimately (streaming video) will have a few clear winners and a graveyard of those vendors that fail." 

In a way, the overabundance of streaming services echoes the proliferation of too many channels in the traditional cable model and the old complaint of "so many channels and nothing is on." Back then, cable companies forced you to get those channels, sometimes thousands of them, and raised monthly fees regularly. Now the power is shifting to the consumer. If they don’t want to watch something, they don’t buy it. 

Startup video platforms will face an uphill battle breaking in. To pique viewers’ interest companies are relying on exclusive, must-see TV content on their platforms. WarnerMedia has HBO's arsenal of hit shows like "Game of Thrones." Disney has an endless stream of popular movies, such as "Frozen" and the "Star Wars" and “Marvel” franchises and it is also planning original shows based on those franchises. Walmart and MGM are putting their money into an update to the 1980s comedy film Mr Mom.

Seth Shapiro, a professor at the University of Southern California's School of Cinematic Arts, is sceptical that all the new platforms will survive the new era of consumer-choice. "How many things are people going to want to pay for at once? How many subscriptions can the market bear?" Shapiro said to the AP. Services "that are sort of nice to have but not really essential will fall by the wayside," he added.

The streaming by subscription contest has parallels to the DVD-by-mail competition of more than a decade ago. In 2002, Walmart created its own online DVD rental service to compete with Netflix. But Walmart closed the service in 2005 and transferred its customers to Netflix, signalling that the world's largest retailer couldn't beat the Internet upstart in its own domain.

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