Netflix has emerged as one of the leading digital streaming, e-commerce companies. Although Netflix has gained international success, many competitors are employing measures that will help them continue to prosper. However, the measures taken by competitors are heavily contingent on the individual competitor. The following companies have been identified as competitors of Netflix: HBO Go, Amazon, and Hulu. An exploration of the strategies employed by each of Netflix’s competitors in order to determine what marketing strategies are using to gain a competitive advantage against Netflix and in the e-commerce industry.
The measures used by Amazon directly affect the successes of Netflix. Amazon is a leader in e-commerce. The company has recently embarked on a new venture, digital streaming. Amazon differs from Netflix as consumers that purchase Amazon Prime, a service that allows consumers to access free two day shipping on all orders, to stream free movies and television series. However, the number of movies and television shows are limited. Yet, Amazon also allows consumers to purchase and rent movies/television series. Renting movies on Amazon starts at $2.99 per movie (Amazon, 2014).
One particular aspect that makes Amazon a feasible competitor of Netflix is the fact that Amazon has formed a strategic relationship with HBO Go. According to Business Insider (2014) “one of the main reasons people subscribe to Netflix is for old TV seasons” (para. 6). However, Netflix does not have a relationship with HBO and therefore cannot show any HBO series. Consumers that want to watch HBO series will need to turn to Amazon or HBO GO in order to access these series.
Yet one aspect that makes separates Netflix from Amazon is the fact that Amazon requires the user to pay for a full year up front prior to using the service. Consumers that are trying different digital streaming services may be deterred by this fact. Additionally, Amazon’s streaming service is only available in certain regions.
HBO Go is another newer competitor of Netflix. However, HBO Go has a dedicated following due to the fact that this service allows consumers to watch popular HBO shows (Business Insider, 2014). HBO Go is similar to Netflix in the sense that it offers original television series. Yet, HBO differs from Netflix in the sense that it already has a dedicated fan base built in for each original series. Furthermore, HBO Go allows users with a subscription to HBO through their cable provider to access HBO shows (current and previous) on various digital streaming devices, free of charge.
Another aspect that sets HBO Go apart from other competitors is the fact that videos/television shows are in high definition (HBO Go, 2014). This aspect differentiates HBO Go from others, as it provides viewers with high quality images. Consumers that are interested in the quality of video/television show being streamed often look for digital streaming services that offer high definition videos. Forbes (2014) further concurs in stating, “we think HBO Go has the most quality movies of the streaming video on demand (SVOD) services and is the clear leader by a wide margin in original programing” (para. 8).
In many ways, Hulu is similar to Netflix. However, Hulu differs from Netflix in the types of television shows being streamed. According to Forbes (2014) “Hulu Plus carries current season episode for 5 of the 6 top US broadcast networks, which is something that Netflix is only able to do for a few select shows in international markets” (para. 4). Many of the top hit series that Hulu has to offer come from Fox, NBC and ABC. The ability to offer the current season of hit shows is one aspect that sets Hulu apart from other digital streaming services.
Another aspect that sets Hulu apart from Netflix is the price. Hulu currently charges $95.88 per year or $7.99 per month. Although current Netflix customers will pay the same for a ‘generous period,’ Netflix has recently announced that the service plans to increase the costs for new subscribers to $119.88 per year.
Although Netflix has emerged as an international e-commerce giant through its digital streaming service, there are aspects that set competitors apart. HBO Go is a free service to consumers that currently have a subscription to HBO through their cable company. Furthermore, HBO has a wide variety of original content that is aired in HD. In contrast, Hulu offers consumers lower prices and the ability to watch prime time television.
Amazon’s digital streaming service is free to consumers that have purchased Amazon Prime. Amazon has also launched a deal with HBO Go to provide HBO series on Amazon’s digital streaming service. This will allow consumers to watch their favorite HBO series, even without having a membership to HBO Go.
The need for Netflix to explore what makes competitors successful is increasingly critical in maintaining the competitive advantage that Netflix has developed. However, Netflix’s competitors, tend to focus on different attributes that set them apart from Netflix.
- Amazon and Hulu Could Slow Netflix Growth in 2014, Morgan Stanley Says (2014) Forbes. Retrieved November 26, 2014 from: http://www.forbes.com/sites/maggiemcgrath/2014/01/07/amazon-and-hulu-could-slow-netflix-growth-in-2014-morgan-stanley-says/
- Before You Go Crazy and Say The Amazon-HBO Deal Means Netflix is Screwed (2014) Business Insider. Retrieved November 26, 2014 from: http://www.businessinsider.com/amazon-isnt-a-netflix-competitor-2014-4
- HBO GO (2014) HBO. Retrieved November 26, 2014 from: http://www.hbogo.com/#signup/
Hulu Plus: Fall is Here (2014) Business Insider. Retrieved November 26, 2014 from: http://www.businessinsider.com/amazon-prime-versus-netflix-versus-hulu-plus-2014-4
- James R. (2014) Top Three Netflix Competitors: Who’s Challenging the Industry Giant? Retrieved November 26, 2014 from: http://www.fierceonlinevideo.com/special-reports/top-three-netflix-competitors-whos-challenging-industry-giant
- Prime Instant Video (2014) Amazon. Retrieved November 26, 2014 from: http://www.amazon.com/gp/feature.html?ie=UTF8&docId=1000739191