The streaming landscape took a notable shift in 2020 — a unique year where homebodies stuck on the couch became the societal norm — and new entities are starting to take their place among the usual heavyweights Netflix, Hulu, and Amazon Prime.
These newcomers include Disney+ and Peacock, the new NBC streaming service, which quickly carved out a chunk of market share based on the pedigree of their brands. As reported by JustWatch, a streaming guide and analytics service, Netflix is still king, much as it has been since the advent of streaming services circa 2010, and the trifecta of Netflix, Amazon Prime, and Hulu remain supreme, if only for now.
Netflix controls 31% of the market, retaining its place with an expansive catalogue and wide array of original content, despite losing many of its flagship titles in recent years to fracturing in the market.
Amazon Prime sits at 22%. This is tied to, in no small way, the package of Amazon Prime Video with Amazon Prime shipping and other offerings — a unique blend of technological services that goes beyond streaming.
Hulu rounds out the top three at 14%, but it’s losing ground.
But 2020 revealed newer streaming services are starting to gain ground on the entrenched leaders, with significant upticks in traffic and subscription for one-time underdogs.
Coming in third, Disney+ stands at 13% after little more than a year of operation.
HBO Max exploded to a 9% market share.
While Peacock surged to 6% in less than a year of operation — in large part, no doubt, because of staple offerings like “The Office,” “The Blacklist” and “This is Us,” which long predated Peacock itself.
And coming up in last place is the anemic AppleTV+ at 3%, which emerged in late 2019 with a tiny library of shows, films, documentaries, and similar content. It remains to be seen if new offerings in 2021 will reverse this trend.
Other niche streaming services take up the remaining 2%.
One major takeaway from 2020? Bundling is making a comeback and it’s here to stay. That may be like nails on chalkboard to anyone from the pre-2010, cord-cutter era when consumers were fighting against a model where they had to shell out $80-$150 per month for 800 channels on cable, only 790 of which were channels they actually used. The good news is that these bundles are more in line with Apple TV+ packaged with ESPN and Starz for a reasonable $12.99 per month, but that does pose the question: What comes next?
Back in the day, Netflix dominated because it had everything the average viewer could want. Sure, there were niche streaming services that scratched a particular itch, or there was a particular show, movie, or whatever that Netflix didn’t carry, but Netflix was the main hub for everything.
That’s all gone now. Netflix gave way to a three-headed beast in Netflix, Hulu and Amazon Prime and to a certain extent that trifecta is still dominant, but there’s more and more signs that trifecta is giving way to streaming services that are more specialized, more narrow in their offerings. The one-shop-stop hub that Netflix once offered is all but vanished from the market now. And, just as there were hundreds of specialized channels on cable, the myriad streaming services popping up every year leans to the alternative — instead of a hub, there’s a bundle.
In many respects, we have been bundling for a long time. Who doesn’t use a combination of Netflix, YouTube and Amazon Prime for their shopping needs, for example, or pays for Hulu for sports and Disney+ to entertain their children? Nobody rarely, if ever, only uses just one. What nobody wants is to return to a model where they pay for a service, but only use a fraction of what they’re paying for, and that seems unlikely — at least, in the short term.
While it may be profitable to shoehorn people into a paradigm where they’re limited to a few options and all of of them involve paying for a package that features more streaming services than an average consumer will ever need, the extent and degree to which this will occur will likely never rival what happened in the ‘90s and early 2000s because cable isn’t the only show in town.
If people don’t like what they see in these bundles, they’ll gravitate to other areas of the cybersphere like music streaming, social media platforms, video games, and other pillars of modern life that didn’t exist in those eras. Life has become more fractured, fragmented, and multifaceted in the meantime.
The move to multiple streaming services, instead of depending on a single source, is reflected in recent surveys of the issue. The biannual TiVo Video Trends report is showing a 35% year over year increase in services per broadband-only subscribers, while pay-for-TV subscribers are remaining steady at the closing of 2020. The average consumer is using nearly seven streaming services (6.7) compared to roughly five (4.9) in 2019.
In addition, the economic pressures of 2020, coupled with ad-friendly mindsets among consumers, mean American viewers are largely fine with free, ad-driven streaming services, over paid subscriptions that dominate the top of the market.
In the survey, 83% of respondents said that switching to a free, ad-supported streaming service was a viable means to save money and maintain entertainment variety.
The same survey revealed 79% would rather use a free, ad-supported streaming service than pay for another subscription-based platform.
In turn, 81% said they wished there was a free, ad-supported version of popular subscription-based platforms like Netflix and Amazon Prime.
The other ramification of this fragmentation is the reemergence and acceleration of piracy, which could spur more bundling. The internet enables people to find illicit, unauthorized streaming options if they have the know-how or time to do so. A 2020 joint study by the Digital Citizens Alliance and NAGRA Kudelski indicate that digital piracy was seeing a significant surge in 2018-2019, while another study published in 2019 estimated that digital piracy was siphoning $29.7 billion from the U.S. economy and that this figure was only going to climb. Obviously, it’s unlikely these researchers could have anticipated the events of 2020, which likely exacerbated the problem.
The key is that people are capable of piracy, but gravitate away from that when a streaming service — historically, Netflix — has ease of access, affordability, and the breadth of options to make piracy inconvenient. As Netflix and other prominent streaming options lose these features, piracy will continue to escalate. It will be interesting to see if this spurs a positive reaction to bundling, or if the golden age of streaming truly did die last decade.