Netflix has won the streaming wars - now prices are rising
[18:08 Wed,29.January 2025 by Thomas Richter]
Recently, there was a boom in new streaming service providers for movies and series, all vying for a piece of the billion-dollar video entertainment market now it&s clear who won the Streaming Wars, which unofficially began in 2019 with the launch of Disney+. Netflix remains the number 1 streaming portal in the USA and Europe, leaving competitors like Amazon Prime Video, Disney+, and Apple TV far behind both in terms of subscriber numbers and profitability.
Contrary to many predictions, Netflix&s crackdown on shared accounts did not harm it on the contrary: Netflix gained many more viewers as planned. And even rapidly successive price increases in the core US market did not lead to a decline in paying viewers: 8 million new subscribers Netflix reported for the last quarter, as well as a 44% increase in revenue to around billion while the competition is largely making losses. Worldwide, Netflix currently has more than 300 million subscribers, a 41 million increase compared to 2023.
Netflix&s Path to Success
But how did Netflix achieve this? First of all, the starting position was good Netflix had already established itself as the largest streaming service before the major competition; all competitors had to compete against this and convince viewers to switch or to take on the advantage of subscribing to an additional service. It was clear to everyone that the market was limited: and that viewers would not always subscribe to another streaming service: the only question was who would manage to become indispensable.
Another factor was, of course, the content: movies and series that simply had to be seen. Netflix landed hits like Stranger Things, Wednesday, Bridgerton, Squid Game, and American Primeval, which generated a lot of buzz in addition to the ever-growing archive of self-produced and acquired films and series.
Netflix has also expanded its offering towards a television replacement with classic TV shows like cooking and reality shows and has invested billions to offer live events such as the boxing match between Jake Paul and Mike Tyson, WWE&s Monday Night Raw Wrestling, and NFL games which actually led to a large jump in new subscribers. Netflix is thus increasingly becoming an all-around television replacement. Netflix is also constantly expanding its offering into further new areas and now also offers games.
The network effect, which had already made social networks like Facebook big, also contributed: from a certain size, growth runs by itself: the more viewers, the more money is available for attractive new productions, the more hits there are (ideally), the more the content is talked about, which in turn leads to more viewers, in short: the bigger, the bigger.
And of course, there is the danger that the quality of new productions will now decrease further due to the lack of competition and that Netflix will focus more on expanding its activities into other areas such as games or live events than on content for cinephiles.
The Price for Netflix is Rising and Rising
In the USA and other countries, Netflix has just significantly increased prices and since Netflix has always followed suit in other countries to keep the price level internationally at a similar level, a price increase will probably follow here as well. It is expected that the price will then be increased to 21.99 for the premium subscription or 14.99 for the standard subscription.
Why is Netflix doing this? Because it can and it&s worthwhile, i.e., a price increase leads to greater profits and thanks to the market position and indispensability for many hardly any subscriptions are canceled. And as long as this continues, Netflix takes this as proof that prices can be increased further and that the pain threshold for many has not yet been reached.