King Kong vs Godzilla — coming to a screen near you
02 May, 2016
Like the many giants that have graced our screens over the years, Netflix has well-articulated plans to take over the world (well — the online streaming world). From humble origins as a mail order DVD company, Netflix is now an internet giant with over 75 million global subscribers on its streaming television platform and plans to expand into 130 more countries.
Television is gradually shifting away from the traditional format and more towards streaming services that can be watched on any device — anywhere, anytime. Netflix has been at the forefront of this change and is now synonymous with streaming television. However Amazon, the world's largest online retailer has entered the fray, announcing its own monthly subscription service in the US. Amazon's service will be cheaper than Netflix and Amazon will be pitching this to its very large user base.
While lower price is one thing, in television, content is king. Good programmes and movies attract new customers; and companies are spending large. Last year Netflix spent $4 billion (or close to 70% of revenue) on content. Many in the industry have started producing their own content, such as Netflix's House of Cards, further increasing costs.
But as Amazon has shown in the past, it is not afraid to spend money to win market share.
So can Netflix prevail or will it be another business flattened by the Godzilla that is Amazon? We think it is still too early to pick a winner here, but continue to keep a very close eye on both companies. Less than half of US consumers subscribe to a streaming video service and the rest of the globe is yet to be conquered. With the average American watching almost five hours of television per day, there may be room for more than one winner.
However it plays out, this battle between these two giants will be worthy of the silver screen.