By: Amanda McKenzie
First comes the color TV, then comes cable, then comes streaming from sites like Netflix, Hulu, and Amazon. As the way we have watched our favorite TV shows has gone from good to great, our beloved streaming sites are beginning to fear their futures as companies like Sony and Apple start to dominate the battlefield. Recently, there have been new offerings from Sony and Apple that are beginning to change the way we will watch our favorite shows yet again. Although Hulu, Netflix and Amazon were basically first movers of this category, new and upcoming competition is forcing them to raise their prices, find new marketing techniques, and become more innovative.
As HBO has been noted to be one of Netflix’s original rivals, other television providers are getting in the ring. Since 2011 there has been a rivalry between HBO and Netflix, causing Netflix to try and get innovative by splitting up the company to raise prices, but this only resulted in a mess and a lot of cancelled subscriptions. Some people think the consumer will add more streaming companies to their households, but either way, Netflix and Hulu are trying to step up their game.
Netflix is currently the most popular home streaming site with 40 million paid subscribers in comparison to HBO’s 30 million. To stay in the game, analysts predict that Netflix, Hulu, and Amazon will have to promote their exclusive dramas and comedies more, as well as market more shows, to make their company the most popular. Netflix is also noted to be spending at least 88% more money on programming this year than the $243 million spent on it last year. I suppose the big question is will families continue to pay for the subscriptions for one of the “Big Three” or will systems like the Playstation 4 Vue be the next big thing?
Marketing Discussions 
Something worth noting here too is the release of HBO Now for Apple products. It will make life a lot easier for people to access and stream HBO shows on demand. Netflix will still have the pricing advantage, but as you mentioned, they will have to market their own original content, as that is what truly differentiates HBO. I would be curious to see what would happen if either company stopped allowing simultaneous usage of one account, since both HBO Go (and eventually HBO Now) and Netflix get massive usage from people who piggy back on their friend’s or family’s account.
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Although HBO is becoming more popular I believe that Netflix will continue to hold their own in this industry. Yes, Netflix will have to raise their prices but I do not believe that a price raise from $8 will cause a loss of many customers given all the streaming they receive with this low price. Netflix will also always stay more popular than HBO among college students who look for an easy and cheap way to watch all their favorite shows and movies. In regards to the family viewing market I believe Netflix will be more popular than competitors because it is convenient and cost friendly and for the most part provide the same product and a variety of family viewing shows and movies or strictly just for kids or adults. In comparison to the Playstation Vue I don’t think many people would opt for the 50 channels for $50 when they can receive unlimited streaming on Netflix for a lot less.
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I believe that the company that offers the most popular shows and movies will be the leader in this segment. My family has both HBOGO and Netflix, and I use them both in different situations. Both Netflix and HBO offer their own series that cannot be seen anywhere else, like House of Cards and Game of Thrones respectively, so promoting these shows will be very important if they wish to stay on top. I think Netflix should start to consider offering newer movies instead of nostalgia ones, since many of HBO’s offered movies are ones that have been more recently released. Since neither of them can offer everything, it’s up to them to try to decide what customers are looking for.
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Although there are other ways to stream shows online, even after the price change, I feel Netflix will still be one of the dominant sites. People enjoy Netflix (and Hulu) for a few reasons and although there may not be many, they are considered big to customers. For starters, people get a free month trial when signing up. Enough said. People love free stuff and what better sales promotion to have than “the first month is on us!” Also, the simplicity in navigating through the websites is a valued trait that some of the newer competitors may not have. Even if a newer site is easy to navigate, subscribers would still have to abandon what they already know well to gain something they may or may not like. I remember back a couple years when I had the blackberry storm. I had had the phone for about 2 years and it finally quit on me. My dad surprised me one day with the droid x, which at the time was the newest big thing. Rather than being as excited as any other person would’ve been, I literally asked if the phone could be replaced from Verizon for a new blackberry storm. Sadly, my request was denied due to the fact that they had stopped making that particular phone so I had no choice but to go with the new. Long story short, people tend to like/enjoy what works for them so sometimes the next big thing isn’t for everybody. It is almost as if people have a bond with Netflix. Lastly, anyone with an x-box or play station can enjoy the benefits of Netflix and Hulu. Even on a laptop/computer/ipad, where there is wifi there is easy access to thousands of shows and movies. Though there are plenty of people in the world who have different tastes and preferences, there is a large group that is completely satisfied with what they already have.
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As companies like Netflix, HBO and Hulu continue to grow, their presence will continue to aid the quickly advancing the usage of online video streaming. They were the first to bring online video streaming to the market and have now become the biggest names around. They also aided in the creation of a new heavily populated niche of consumers that just stream their entertainment through one of these big names, and no longer subscribe to a T.V. provider.
According to the New York Times article, “Ownership of T.V. Sets Fall in the U.S.”, for the first in more than twenty years, the number of homes in the United States who own a television has dropped. The article points at two major reasons for the drop. First, the price of television subscriptions has risen too high for low-income families, who are no longer to afford the rates due to financial shortage. The second reason is completely thanks to online video streaming sites like Netflix and Hulu. Because our generation and generations behind us have begun growing up with more access to technology, such as smartphones, tablets and laptops, we are more prone to adopt the online streaming platform then buy an expensive T.V., especially when someone in our generation enters the workforce and has the money to do so. Many college graduates are opting instead to rely on streaming from Netflix, versus buying a T.V. and the expensive subscriptions that come along with that. Another way in which Netflix and HBO have influenced the switch between online streaming platform and television subscriptions is by offering shows that can only be found by subscribing to their programming: only House of Cards and Orange is the New Black can be found on Netflix, while only Game of Thrones can be found on HBO. By having such exclusively, these companies force consumers to subscribe with them, if they desire to watch the shows that only they offer. Yet again, creating another niche of usage. I think the Playstation 4 Vue will have a place in the consumer market place. However, I think it will be marketed to to a different set of people than, for example, Netflix. While Vue will focus on live streaming options, Netflix has created a very large community of those who love to “binge” watch. A site like Netflix is also averrable to so many more people than Vue is – consumers can access Netflix via a smartphone, tablet, laptop, gaming console and smart T.V.; versus Vue, which can only be accessed via Playstation. I think there is still a lot of growth and potential to be added in both the online video streaming platforms and programs such as Vue.
http://www.nytimes.com/2011/05/03/business/media/03television.html?_r=0
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I think it’s important to note that the way HBO and Showtime acquire their content versus Netflix, Hulu, and Amazon Prime. HBO and Showtime actually produce their own content for their shows to stream, so naturally they will have exclusive content which they like to keep at the highest quality (Game of thrones, The Sopranos, and Weeds for example). HBO and Showtime also have to get the most recent movies as they also serve as premium cable offerings to a television viewer. Netflix, Hulu, and Amazon prime however design their streaming selection around shows and movies already released, in which they can gain the rights to for public consumption. These rights are often very expensive, as for the series Friends each episode cost nearly $500,000 each, which is why major additions are done every few months. This is the same reason your favorite television show or movie disappeared as the rights were lost to the show. Netflix was the first of these 3 to offer in house productions. To which it has received critical acclaim (Orange is the New Black and House of Cards), This may have to be the future for the other two as well. If each company begins to offer their own “Great” series then that would drive up customer demand for that service. I personally use HBOGO exclusively to watch Game of Thrones, because it has the exclusive rights to that show.
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My family and I have subscriptions to Netflix and Hulu. Which for me is the best of both world because through Netflix i get to watch whole series of shows, and through Hulu i’m able to keep up on the shows that air on TV that I miss. I personally like Netflix better than all of them. I think they have a good variety of shows and movies. And I also like all of the original series they have, like House of Cards and Orange is the New Black. I have seen a rise in people using HBO for streaming, but I think Netflix will remain on top because of the first free month they offer, easy navigating through their site, original series, and the overall low cost. I also feel like people are hooked on Netflix more than HBO because they do a better job advertising and pulling people in.
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Netflix, Amazon, and Hulu have all had success. In order to keep this success these streaming sites need to keep innovating. Even trying new and different things that may not work. The most bizarre ideas sometimes become the most popular things. Streaming movies and TV shows has become so huge that more and more companies want to join this competitive industry. If the original streaming sites don’t continue to compete with the rising powers like HBO, Apple, and Playstation, they will become irrelevant.
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Although I do love Netflix a lot and would feel that it is my “go-to” video streaming app, I am also a fan of HBO GO and Starz Now. However, with HBO Now being released, this causes new wave of competition for Netflix and Hulu, giving the customer the ability to watch what ever they want on HBO at the tips of their fingers. Like Sam said, companies have to keep innovating to keep up with the quickly-changing environment and also to keep their current success.
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Personally I feel as if Hbo will in the long run be on top on terms of these networks. It is more expensive but you get much more from HBO in terms of new films, series, comedies, live stand up. The big three as mentioned in the article have a standing in nthe market as people in this market will ahave their preference. I feel as if Netfilx not having a good original show other than Orange is the New black will fall to HBO as it already has made a name for itself with series like Game of Thrones, True Detective and major comedians performing their stand ups on the HBO instead of other networks. Hbo will become the powerhouse as Netfilx , Hulu, and Amazon will not be able to compete in terms of producing new attracting material.
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Bold prediction. I think Netflix will be able to compete but I have to agree, HBO is coming for the top spot. I’m also interested to see if they disallow the simaltanious usage of accounts… I certainly have friends piggy backing mine, I firmly believe if they couldn’t, the would pay for Netflix. Another point I wanted to make is that people with an Xbox would be hard pressed to buy a PlayStation 4, the Apple offering on the other hand should be huge for HBO.
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Bold prediction. I think Netflix will be able to compete but I have to agree, HBO is coming for the top spot. I’m also interested to see if they disallow the simaltanious usage of accounts… I certainly have friends piggy backing mine, I firmly believe if they couldn’t, the would pay for Netflix. Another point I wanted to make is that people with an Xbox would be hard pressed to buy a PlayStation 4, the Apple offering on the other hand should be huge for HBO.
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