Netflix still dominates as Disney+’s growth has stalled — where does everybody else stack up?
Now that we’re two years into the full-blown streaming wars, it’s a good time to see just where every streaming service sits now that that new streaming service “smell” has worn off.
Growth has started to stall a bit at some of the newcomers, particularly Disney+. The main takeaway following the latest round of quarterly earnings disclosures is that Netflix still dominates the streaming space worldwide, but there remains room for others to carve out a chunk of the market.
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According to data from Ampere, the the average U.S. subscription household (with at least one streaming subscription service) has access to 4.4 services, with a combined spend on these services averaging just under $44 per month. That is up slightly from a year ago, when the average was 4.0 services per household.
But how do the streamers stack up against each other?
Though Netflix has had to deal with some rare internal fallout over Dave Chappelle’s comedy special “The Closer,” the streaming giant remains head and shoulders above the rest of the crowd. It has more than 213 million subscribers, almost a 100 million more than its closest competitor (we’re discounting Amazon Prime here because that subscription includes shipping deals and shopping discounts).
In its most recent quarter, Netflix added 4.4 million subscribers, though fewer and fewer of those are coming from the U.S. — which has only added a net total of 88,000 subs through the first nine months of this year.
The majority of Netflix’s new customers are coming from the Asia-Pacific and EMEA (Europe, Middle East and Africa) regions; Asia in particular has contributed with 4.6 million subscribers so far in 2021. That in turn has led to an increased investment in foreign-produced shows, which are much cheaper to make and which often travel well beyond their own borders.
Take the South Korean-produced “Squid Game,” which has bulldozed through every other Netflix series, including high-profile U.S. shows like “Bridgerton,” “The Witcher” and “Stranger Things.” Take your pick of the metric and “Squid Game” comes out on top: Within its first 28 days, the nine-part series was viewed by two-thirds of subscribers (142 million), who have watched a collective 1.6 billion hours of the dystopian drama. Along with “Squid Game,” France’s “Lupin” and Spain’s “Money Heist” have frequently landed on the service’s daily Top 10 lists.
The streaming giant also took the rare step of providing more transparency into who and how many people are watching its shows, doing away with its often criticized counting method of registering a view when someone watches as little as two minutes of a show or movie. Netflix launched a new website, which provides daily and all-time rankings both globally and by country, using its new “total hours watched” metric.
Netflix is the undisputed king of streaming until someone knocks them off, which we don’t see happening anytime soon.
Disney+ has been the closest challenger to Netflix, which is impressive considering it just celebrated its second birthday. But the studio’s decision to rely almost exclusively on fan affinity for Marvel, “Star Wars” and Pixar projects could be dampening its growth potential.
Disney+ reached 95 million subscribers in its first 12 months, a number the company didn’t initially think it would hit until 2024 at the earliest. But since then, growth has come crashing down to Earth. Disney added only an additional 2.1 million subscribers in its most recent quarter, far below the 10 million that Wall Street had been expecting. Not only was this the second time in 2021 that Disney+ failed to meet analyst expectations, it was Disney+’s smallest subscriber gain in its short lifespan.
“The number was a little surprising, even though (Disney CEO) Bob Chapek had guided to low single-digit million, but I think their suspicion was that somehow they were going to be much better than that,” CFRA anaylst Tuna Amobi told TheWrap. “But as you can peel back the layers, I mean, obviously they had this disruption in their supply chain and also the the India cricket rescheduling and also the Latin America delayed launch… we don’t think there’s anything structural that has happened and all of a sudden the streaming growth has fallen off a cliff.”
Disney executives expect subscriber growth to pick back up as it re-starts to roll out more Marvel and “Star Wars” spinoff series, which began this month with the holiday-themed Marvel limited series “Hawkeye.” By this time next year, Disney execs expect to have one series each from “Star Wars,” Marvel and Pixar per quarter. Last week, the company announced its spending on content will increase 30% next year, to $33 billion. Even with the slowdown, nearly 120 million subs in two years is nothing to scoff at.
Throughout this year, the executives behind HBO Max have proven willing to accept some short-term pain for long-term gain. First, they likely sacrificed some box office revenue by making all of Warner Bros.’ 17 movies this year — including next month’s “Matrix” sequel — available on the same day to HBO Max subscribers at no extra cost.
While that helped boost the streamer’s global subscriber count from 61 million to nearly 70 million so far this year, the U.S. numbers haven’t mushroomed dramatically — rising just a few million in 2021 to 45 million. Part of the blame is due to another decision that traded short-term losses for (potential) long-term gains: HBO Max was removed from Amazon Prime Video Channels in September, which led to a net loss of 1.8 million subscribers in the most recent quarter.
“We think long term, we’ll have a healthier, more robust and ultimately, larger business if we earn those direct-to-consumer relationships ourselves,” WarnerMedia CEO Jason Kilar told TheWrap last month. “You have to be willing to accept short-term impact in the best interests of the long term. We up lifted our guidance for the year… that was done knowing that we were going to have this exit.”
Prior to the Amazon exit, HBO Max was growing steadily. With only one more film remaining on its dual-release plan, next month’s “Matrix: Resurrections,” HBO Max will soon find out just how many subscribers were paying just for those movies. For his part, Kilar has said he’s not at all worried. HBO Max will still get 2022 films like DC films “The Batman,” “The Flash” and “Black Adam,” as well as movies like Baz Luhrmann’s Elvis biopic, 45 days after their theatrical premiere.
“Episodic is coming back,” HBO Max chief Andy Forssell said. “It was a little thinner this year because of the production shutdowns. The popcorn from the day and date films were obviously a great counterpoint to that. But those gloves have kind of come off because programs are coming back.” Among series planned for 2022 include a spinoff of “The Suicide Squad” starring John Cena’s Peacemaker, a new “Game of Thrones” series and second seasons of critically adored “The Flight Attendant” and “Hacks.” Warner Bros. is also ramping up development for streaming films, including “Batgirl.”
Hulu is in a weird spot in the Disney family of streaming services. On the one hand, the ad-supported streamer gets lauded for some of its programming, including “Only Murders in the Building” and “Dopesick,” as well as the ones produced by FX like “Mrs. America” and “Reservation Dogs,” and actually turns a profit thanks to strong ad sales. However, it’s only added around 14 million net subscribers since the fourth quarter of 2019, and its sub count sat at 44 million as of the end of September.
One factor that may be throttling its growth are the ownership issues with Comcast, which still owns a third of the streaming service that Disney is on the hook to buy out by 2024 — though many analysts argue that Disney should try to get that over with sooner. At the moment, the streamer is in a bit of limbo since Disney has a financial incentive not to grow it too fast since that will make the Comcast buy-out even more costly.
The service has faced other executive-suite challenges, including the exit of President Kelly Campbell last month after four years. “Hulu management has been in turmoil for the past couple of years with a steady flow of departures, as it has been (unhappily) absorbed into the Disney streaming mothership,” Lightshed analyst Rich Greenfield wrote in a recent note ahead of Disney’s earnings. “To make matters worse, with the importance of streaming subscribers growing by the day, the cost of buying out Comcast’s 33% stake in Hulu could already be well north of $15 billion compared to the floor valuation of $9 billion; every day [Disney CEO Bob] Chapek waits, the cost is going up.”
The rebrand of CBS All Access into Paramount+ earlier this year has certainly led to an increase of subscribers for ViacomCBS’ streaming businesses, which after very slow growth in 2020 has more than doubled its customer base in the first nine months of 2021, from 19 million at the end of 2020 to 47 million as of Sept. 30.
While the company does not break out numbers for individual services, which include Showtime OTT and BET+. in addition to Paramount+, ViacomCBS said it expects to reach 65-75 million combined global subscribers by 2024. ViacomCBS’ streaming revenue rose 62% in the third quarter, crossing $1 billion for the first time ever.
Earlier this month, Paramount+ said it had its best-ever week in terms of sign-ups, with 1 million new subscribers, thanks to the debut of Taylor Sheridan’s “Mayor of Kingstown” and the Paramount family film “Clifford the Big Red Dog,” which opened simultaneously in theaters. Last week, Paramount+ also debuted the first of 14 “South Park” specials exclusive to the site — though HBO Max licensed the streaming rights to all 20-plus seasons of the original Comedy Central series, including new episodes, through 2026.
Despite the apparent success, some analysts question Paramount+’s long-term viability and debate whether Showtime should be rolled into the service to provide a deeper library of programming. “I’m not sure that Paramount’s content is good enough to compete as a standalone,” Wedbush anaylst Michael Pachter said.
Discovery was one of the last to jump into the streaming arena, with Discovery+ launching just a few days into 2021. In that time, Discovery+ has amassed 20 million subscribers globally. Unlike its streaming competitors, Discovery+ is exclusively devoted to non-scripted content and quickly gained 12 million subscribers within its first two months. It’s added around 8 million in the months since, about a 3 million-per-quarter clip. Discovery CEO David Zaslav is bullish on its future prospects, especially once his planned $43 billion mega-merger with WarnerMedia closes sometime next year.
Less than half of U.S.-based Discovery+ subscribers are also subscribed to WarnerMedia’s streaming service, HBO Max, which offers huge potential for growth. “Assessing the overlap in respective subscriber bases, at least here in the U.S., we believe less than half of Discovery+ subscribers are also HBO Max subscribers, which with the right packaging, provides a real opportunity to broaden the base of our combined offering,” Zaslav said during an earnings call last month.
While it’s not yet clear what HBO Max and Discovery+ will look like once they’re under the same roof, they’re definitely going to be bundled together in some way.
During last month’s third-quarter earnings report, Comcast executives declined to share the number of sign-ups for its fledgling streamer Peacock — which can’t be seen as a good sign, no matter how much NBCUniversal CEO Jeff Shell has tried to spin it. “Everything on Peacock is heading in the right direction, and there’s really nothing from a trajectory perspective that’s any different than it was last quarter or the quarter before. All metrics are pointed up,” Shell said.
Last we heard, Peacock had reached 54 million users by July 29, amid the Tokyo Olympics that was boosting Peacock growth with hundreds of hours exclusive streaming-only coverage. At that time, Comcast also said the streaming platform boasted 20 million monthly active accounts.
The Tokyo Olympics began more than three weeks after Q2 ended. Therefore, the lion’s share of that Olympics-signup surge likely took place in early Q3, but before the second-quarter’s earnings call. While Q3 or to-date Peacock signups are likely higher than they were in Q2, many suspect the total user count as dropped below the 54 million that the company reported in late July.
For what it’s worth, Pachter thinks Peacock “probably will be” fine in the long term, largely due to its sports offerings. The streamer began airing “Sunday Night Football” this season and just inked a new six-year deal with the Premier League. “They have the most to lose because of cord cutting at Comcast,” Pachter added.
Apple TV+/Amazon Prime Video
We’re cheating a bit and putting these two together. The main reason is, unlike the other paid streaming services, Amazon and Apple don’t typically disclose their subscriber numbers (in Apple’s case, we have never known the number of subscribers or active users).
Earlier this year, Amazon disclosed that it had more than 200 million Amazon Prime customers, but that subscription that also includes free shipping and other retail discounts so it’s unclear how many subscribers actually use Prime Video.
Apple has been similarly un-transparent about the use of its 2-year-old Apple TV+, which often comes free for up to a year with the purchase of a new Apple device. But last July, the tech giant claimed it had less less than 20 million paying subscribers in the U.S. and Canada — in a message to the Hollywood’s union for below-the-line workers, the International Alliance of Theatrical Stage Employees, to justify paying a discounted rate to those workers compared to bigger streaming services.
These two are playing a bit of different game: Both are tech companies that make the bulk of their money on businesses other than streaming content. But both have also been significantly ramping up their spent on new and original content. Amazon moved to acquire the James Bond studio MGM for $8.45 billion, just released a pricey fantasy series based on the “Wheel of Time” novels, and has already spent roughly $1 billion to develop a new “Lord of the Rings” series.
Apple TV+ has been spending big as well, paying a record $25 million for the Sundance drama “CODA” last January and developing expensive dramas like “The Morning Show” and an adaptation of Issac Asimov’s sci-fi epic “Foundation.”