2016-01-15 10:05

What is the strength of Netflix?

In the first week of January 2016 the American service Netflix was launched in several new countries, gaining more than 190 global markets. So is it safe to say that it's the leader in its field? By Radosław Gołąb, Gemius expert.

Netflix was the pioneer in the delivery of video on demand. For this reason, among other things, it is the uncrowned king when it comes to video streaming services in the USA. However, being first is not the only factor. So what is the strength of Netflix?

Netflix offers more

The fact that Netflix has more than 50 million subscribers worldwide is mainly due to its huge library of titles. Netflix offers all the most popular films and series, as well as excellent original productions, such as "House of Cards”, "Orange is the New Black” and "The Square”. Netflix productions have repeatedly been nominated for Emmy awards and have won many times.

It is also very interesting to note that Netflix's policy on their film catalogue is to update it on a regular, monthly basis. Films are deleted as well as added. This gives users the feeling that the available films are new, and the service is alive and growing. Of course, subscribers are informed of all changes so that they can catch up on the materials they want to watch before they disappear from the service.

Watch where you want

The technical aspects should also be noted. Netflix is available on virtually any device. Video material can be viewed via PC, Xbox One, PS3, Xbox 360, PS3, Nintendo Wii, or Chromecast, on devices running Android, iOS or Windows, and many, many more.

Power struggle on the American market

Of course, in the USA, Netflix has very strong competition from Amazon and Hulu. What are their advantages, and how does Netflix outcompete them? The actual business models of Netflix, Amazon and Hulu are similar. However, as in any field, the devil is in the details. So how do these services compare?

Netflix – monthly subscription is around $9. For this price, users have access to a very well-balanced catalogue in terms of the amount of TV and big screen content. Very importantly, Netflix doesn’t display ads. In terms of value for money, Netflix is the most versatile content provider, especially considering the fact that new titles are added each month. To sum up, Netflix offers its users a seemingly perfect blend of quality and quantity of video materials, combined with availability and very reasonably priced. The estimated number of videos on Netflix is around 25,000.

Of course, the number of products available differs from country to country. You can see a complete list of the Netflix resources available on particular markets on this website.

Amazon Prime – Amazon is slowly becoming one of the main suppliers of video on demand in the USA. The service offers a fairly large catalogue of older HBO productions, as well as its own productions, such as the critically acclaimed "Alpha House” and "Transparent”.

An account on Amazon Prime provides not only the ability to watch videos, but also additional services, such as access to the music library, free express shipping and access to rental e-books.

However, the biggest downside to Amazon Prime might be the price. In contrast to Netflix and Hulu, you can't pay a monthly subscription. Amazon demands an upfront payment of $100 for annual access. After the first year, monthly access costs just over $8, but the initial cost is quite high. The estimated number of videos on Amazon Prime is around 5,000.

Hulu – The biggest difference in the business model between Hulu and Netflix/Amazon is that on Hulu, even subscribers see ads. Moreover, the cost of subscription is roughly the same, at $8. Hulu did recently announce the availability of an ad-free option, but here the subscription price rises to $11.99.

The biggest strength of Hulu is that you can watch material via the VOD model the day after the TV broadcast. Hulu has the rights to one of the most popular TV series in the US – "Seinfeld" – as well as the animated series "South Park”.

The Hulu catalogue includes unique films and series, but it doesn't have anything that would threaten the position of Netflix.

To sum up, Hulu provides access to the most popular films, TV episodes and video materials, but its library is too small in comparison to Netflix. The estimated number of videos on Hulu is around 10,000.

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Radosław Gołąb

Dyrektor ds. rozwoju biznesu reklamowego w Gemiusie

w Gemius odpowiedzialny za rozwój produktów skierowanych na rynek reklamowy, czyli adserwera AdOcean oraz badania gemiusDirectEffect. Wcześniej przez 3 lata związany z brokerem Atmedia Sp. z o.o., gdzie specjalizował się w rozwijaniu oferty reklamowej wideo. Jest ekspertem w poszukiwaniu nowych obszarów ekspansji reklamy internetowej, mobilnej i niestandardowej.

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