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Consumers emerge clear winners amidst the streaming wars

January 27, 2022

Family watching TV together

Netflix, the prime mover in the OTT streaming space, announced its quarterly results last week. Netflix added 8.28 million global paid net subscribers in the fourth quarter. Analysts had expected the company to add 8.19 million. Netflix said it expects to add 2.5 million subscribers during the first quarter of 2022, far below the 3.98 million it added in Q1 2021. “Consumers have always had many choices when it comes to their entertainment time – a competition that has only intensified over the last 24 months as entertainment companies all around the world develop their own streaming offering,” Netflix said when announcing the results. And this comes on the heels of Netflix raising its prices in the US and Canada. Netflix isn’t alone in encountering a plateau in new user growth.

Disney+ added just 2.1m subscribers in the financial quarter ending 2nd October 2021, up 60% year on year to reach 118.1m according to Statista calculations, a figure up just 2% over the prior quarter (116m) though. Interestingly, Disney+Hotstar, acquired as part of the 20th Century Fox acquisition in 2019, accounts for 40 percent of the users. Disney will be shutting down Hotstar in the US in late 2022, and the content will be split across Hulu and ESPN+.

However, the slower than anticipated growth in user base cannot be mistaken for slowing momentum in the OTT streaming ecosystem. On the contrary, the streaming wars are becoming more intense and visible, particularly outside the United States. Disney+, for example, is currently available in over 60 countries and 20 languages, but its international presence is scheduled to more than double to 160 countries by the fiscal year 2023. To keep up with Netflix, Disney+ is ramping-up production of localized content. And a similar strategy is being embraced by Amazon Prime and Apple TV+.

Closeup of mobile phone screen with logo lettering of various tv movie streaming services on laptop keyboard

The competition is playing out differently in emerging markets, especially in Asia, where most services are witnessing healthy growth in new subscribers. These markets also happen to be much more price-sensitive than, say, North America and Europe.

Netflix and regional players like HOOQ, iFlix, and Viu have introduced low price tiers in emerging economies to reel in new users. For instance, in 2018, Netflix introduced a US$4 mobile-only plan in Malaysia – almost half the cost of its “Basic” tier (US$7.90).[i]

India has so far proven to be an important testing ground for Netflix. In 2019, the streaming giant rolled out a US$2.70 plan that gave users mobile-only access to its catalog in standard definition. There are even rumblings of a US$4/month plan and a “sachet package” valued at US$0.90 per week.[ii]

Sachet pricing has caught on in emerging economies like India, where inexpensive data plans are fueling content consumption, especially in rural areas. SonyLIV, a leading India-based OTT platform, introduced sachet packages for live sports broadcasts priced at US$0.50 a week. In a stroke of genius, the platform timed its rollout to coincide with the

Indian Premier League cricket tournament to capitalize on the country’s national mania for cricket.[iii]

Another strategy has been to have an ad-supported service to entice subscribers to sign-up for the ad-free versions. Platforms like HBO Max, Hulu, and Disney+ have introduced cheaper ad-supported video-on-demand (AVOD) subscriptions to combat subscriber numbers’ slow but inevitable plateauing. Free access to AVOD services like Amazon’s IMDb TV act as entry-level streaming options that could gradually lead users to sign up for higher-tier services like Prime, Amazon’s SVOD.[iv] Though Netflix has stayed away from ad-supported models, it’s clear that other OTT platforms like Peacock and Discovery+ see ads as a gateway for growth in a hypercompetitive space.[v]

Consumers have emerged as clear winners amidst this competition with many services to choose from with content libraries that cater to all demographics and interests and across as many markets. Mobile carriers have come to embrace the concept of bundling OTT services as part of mobile subscription plans. These bundles also enable mobile carriers to drive higher engagement and share-of-wallet from their mobile subscribers while offering them services consumers are more than eager to lap up. With this competition only expected to heat up with new OTT services in the fray, consumers worldwide are being overwhelmed with more choice of content than they have ever had. 


[i] https://techcrunch.com/2018/11/14/netflix-is-testing-a-mobile-only-subscription-to-make-its-service-more-affordable/

[ii] https://www.indiatoday.in/technology/news/story/netflix-rs-299-mobile-plus-plan-will-let-users-stream-in-hd-give-access-to-more-devices-1778031-2021-03-11

[iii] https://www.docomodigital.com/resource/blog/ad-supported-video-a-boon-for-marketers/

[iv] https://www.thehindubusinessline.com/info-tech/ott-players-taking-sachet-route-to-mass-market/article26847608.ece

[v] https://www.indiewire.com/2019/07/imdb-tv-prime-video-analysis-1202156984/

[vi] https://www.docomodigital.com/resource/blog/ad-supported-video-a-boon-for-marketers/

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