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Google isn’t exactly a novice when it comes to streaming. The Mountain View company, lest we forget, purchased YouTube back in 2006. The ubiquitous video hosting site boasts incredible statistics: billions of hours of video watched daily around the world. According to a Statista study, YouTube made up 37% of worldwide internet traffic on mobile devices in March 2019 – total domination. We also can’t forget Google Play, another flagship product, that also contains lots of content (films, TV series, music, books, etc.).
But a much less popular Google platform was making headlines recently. The US group is suffering blowback from its failed streaming video game service Stadia that launched in 14 countries in November 2019. Google is not currently providing an official number of subscribers, but it seems quite low compared to the number of subscribers for other industry giants, such as Sony and Microsoft, when they launch a new console. On paper, the project does seem promising. For €9.99 per month, gamers can stream 22 of the latest popular games (Red Dead Redemption 2, Destiny 2, NBA 2K, etc.). Included in the Founder’s Edition pack: a controller and a small, round Chromecast dongle that plugs into your TV’s USB port.
But the platform has been under fire since it launched. The system isn’t as responsive as expected, especially when using a WiFi connection, and many users complain of latency times. Google announced that it would eventually expand its offer to more than 120 games, without providing much further detail.
If the technical difficulties can be overcome, video game streaming could result in some fascinating opportunities for Google. The behavioural data gathered on Stadia users could feed into Google’s main revenue stream: advertising. Online gaming could give Google a better understanding of community spirit and it could make up for lost time on social networks – Google+ never having proved able to compete with Twitter and Facebook.
Patrick Stewart no longer wanted to don the costume of Jean‑Luc Picard or set foot back aboard the Enterprise 26 years after the end of Star Trek: The Next Generation. But Amazon must have had some powerful arguments, because the British actor is back in the series Star Trek Picard, with a premiere on Prime Video on 24 January. Just like that, the online retail leader has coasted to the top of the streaming game within the space of a few years.
How? Amazon Prime. Launched in the United States in 2005, this service (not available in Switzerland) first offered fast delivery of items purchased on Amazon for an annual membership fee. Charging users $119 per year in the United States, the programme now includes other benefits. All members enjoy free access to Prime Video and Prime Music. In 2018, Prime surpassed the symbolic threshold of 100 million subscribers worldwide. In his letter to shareholders, Amazon boss Jeff Bezos stated that the series and films available on Prime Video are the main draw and the reason most people join Amazon Prime, and the content also keeps online retail customers loyal.
Since 2018, Prime members have also been able to download video games for free via Twitch Prime. This service could switch to streaming in the near future, as there have been murmurs that Amazon is planning to launch a cloud gaming platform in 2020. Analysts at Jefferies recommend buying shares, setting a price target of $2,300, compared to the current price of $1,850.
Apple’s announcement in June 2019 that it was killing iTunes sent a strong message: downloading is a thing of the past – make way for streaming! Apple will replace its famous software with three apps: Apple Music, Apple TV+ and Apple Podcasts. iTunes forever changed the music industry when it hit the market in 2001. But the advent of streaming – with the creation of services such as Pandora in 2000, Spotify in 2006 and Deezer in 2007 – put an end to the tech giant’s position as supreme leader. Since its launch in 2015, Apple Music has risen to second place in the global streaming market, with 50 million users. But that is still far behind the undisputed leader, Spotify, and its 113 million paid subscribers.
In subscription video-on-demand (SVOD), Apple faces the same situation. Released long after Prime Video and Netflix, Apple TV+ is behind the game. However, when it comes to podcasts, it is a real pioneer. iTunes added a special tab just for podcasts back in 2005. But the California-based company rested on its laurels, happy merely distributing content. Today, Apple hosts 550,000 podcasts, retaining its leading position, but Spotify is nipping at its heels with 500,000 podcasts.
That being said, Apple has an advantage over the market’s pure players: streaming is a non‑core business activity that mainly aims to lock customers into its ecosystem. The Apple TV+ platform is almost free – buyers of iPhones, iPads and other Mac products receive free access. Most analysts recommend buying shares.
A latecomer to streaming, with its SVOD Peacock service scheduled for release in the spring, Comcast dreams of becoming a Netflix-style international success story. In 2018, the group bought Sky UK, the British telecommunications operator, to strengthen its position on both sides of the Atlantic.
In April 2019, the Discovery Group, known for its Discovery Channel and Animal Planet networks, bought the VOD rights on content from the BBC’s Natural History division (except in the United Kingdom, Ireland and China). This deal will enable Discovery to launch its SVOD service in 2020, focusing on the niche market of natural history, travel and science.
"Disney is an amazing company... We admire them." A good sport, Reed Hastings did not hide his admiration when asked about his new competitor Disney+, launched in November 2019. "I’ll subscribe, they’ve got great shows," the Netflix boss even said. However, Disney could actually pose a threat to the leader of SVOD.
We often tend to forget it, but Mickey’s parent company is no novice when it comes to streaming. As owner of Hulu, ESPN+ and FX+, the group already has a strong position in the United States. The launch of Disney+, the new star in the empire, expands this offer with a vast catalogue of all the franchises from the Disney galaxy: Marvel, Pixar, Star Wars, National Geographic and all the Walt Disney productions since the studio was created in 1923. And all this for the ultra-competitive price of $6.99 per month in the United States, compared with $12.99 for the standard Netflix subscription. With that positioning, Disney+ appears to be some sort of ogre for Netflix and all future operators such as HBO Max and Peacock. "Obviously there will be a lot of players out there," Clark Spencer, president of Walt Disney Animation Studios, told AFP, "but I think for us having that depth of that library and the storytelling talents that sit within the studio, it’s really going to be what sets us apart."
Disney is targeting 65 to 90 million subscribers to its platform worldwide within the next five years. Analysts, who recommend buying shares, believe Disney will beat that goal. Bernie McTernan from Rosenblatt Securities believes that the company will have more than 35 million subscribers by September of this year. Digital TV Research expects Disney+ to have 100 million subscribers by 2025, compared with 236 million for Netflix.
In December 2019, Facebook announced that it had acquired the Spanish cloud gaming platform PlayGiga. Although nothing suggests that this acquisition foreshadows a foray into video game streaming under the network’s blue banner, such a move would make sense. Mark Zuckerberg’s creation already has Facebook Gaming, but the livestreaming channel is struggling to carve out a slice of the market largely dominated by Twitch.
America’s radio giant iHeartMedia is going through a rough patch. The company nearly went bankrupt in 2018 before picking itself up slightly. Its streaming platform, iHeartRadio, compiles content from the 850 radio stations owned by the group along with hundreds of others from a variety of media sources.
Founded by China’s leading internet search engine Baidu, iQiyi is one of the world’s largest video streaming websites with over 500 million active monthly users. The company’s IPO on the Nasdaq raised $2.25 billion in 2018.
Well established in the video game world for nearly 20 years (the first Xbox came out in 2001...), Microsoft is preparing to update its offer with new options in the cloud. Last year, the Redmond group launched a beta version of its streaming platform called xCloud, which is somewhat similar to Google’s Stadia. But the notable difference is that Microsoft gamers will be able to access the entire catalogue of games, which is quite expansive. The service is expected to be available sometime this year on PC, Android and iOS.
With this launch, Microsoft has the chance to build an attractive ecosystem around streaming games. The US company owns the Mixer platform, a competitor of Twitch, where users can broadcast their games live. But Mixer stands out because users can actually interact with the platform; watchers can participate in the live feed by taking over control from the original player. But as it stands now, Mixer makes up less than 5% of all content watched, compared to 70% for Twitch, according to data from Stream Hatchet.
To launch these new services, Microsoft can make use of Azure, its powerful in-house infrastructure in cloud computing. xCloud runs off of 54 Microsoft data centres spread across 140 countries.
- Foundation: 1999
- Headquarter: SEONGNAM (KR)
- Revenues: $4.75 BN (2018)
- Effectives: 2'800
In Korea, no one reads comics on paper any more – they use their smartphones. The search engine Naver, hailed as the Google of South Korea, is a leading provider of these webtoons. The company also has an SVOD service called Naver TV Cast.
Champagne and galas. The stars were out on 17 January for the inauguration of Netflix’s new Paris offices. CEO Reed Hastings himself came to the French capital to pose alongside Paris mayor Anne Hidalgo and French culture minister Franck Riester. Why all the fuss from Netflix’s boss for what boils down to a small subsidiary? Because growth outside North America has become imperative for the video-on-demand (VOD) leader. The launch of Disney+ has impacted the company’s bottom line. In Q4 2019, Netflix only brought in 550,000 new subscribers in the United States and Canada, well below the 1.7 million customers it drew the year before.
And so the company is seeking solace abroad. At the end of 2019, Netflix surpassed the 100 million subscribers mark for the first time outside its home territory, compared with 67 million in North America. That represents nearly 28 million more customers in one year, of which 14 million are from the Europe, Middle East and Africa region – figures that exceeded analysts’ forecasts by far. One of the reasons for its success is that Netflix produces content in every country where it operates, such as La Casa de Papel in Spain, Dark in Germany, Atelier in Japan, 3% in Brazil and Sacred Games in India. To move forward with this strategy, in November 2019, Netflix announced a production agreement with the Korean company CJ ENM. In its letter to shareholders published on 21 January, Netflix pointed out, “local originals were the most popular titles in many countries, including India, Korea, Japan, Turkey, Thailand, Sweden and the UK.”
Even though they plan to hassle Netflix the world over, Disney+ and Apple TV+ produce little content outside the United States. The only rival to do so is Amazon, but to a much lesser extent. And despite having more subscribers abroad than in the United States, Netflix’s US base still accounts for the largest share of its revenue.
On average, an American customer makes the company $151 per year, compared with $124 in Europe. Most analysts, such as Bernie McTernan from Rosenblatt Securities, recommend purchasing shares, although some fear the growing competition.
Nvidia’s streaming video game platform, dubbed GeForce NOW, has been available in beta version for several years. This experimentation phase is expected to lead to a market offering in 2020. The service will be available via Windows, Mac and Android smartphones. Users will be able to play hundreds of games, accessible via their personal libraries.
- Foundation: 1997
- Headquarter: TOKYO (JP)
- Revenues: $10.117 BN (2018)
- Effectives: 17'214
Known in Europe for buying PriceMinister in 2010, the Japanese e‑commerce giant Rakuten is following in Amazon’s footsteps and is entering the world of streaming. Its video‑on‑demand service Viki, focused on Asian content, is popular with young people. In October 2019, the group launched Rakuten TV in Europe, a free, ad‑supported video‑on‑demand (AVOD) service.
An industrial saga for the internet era. Here’s the short version of the RealNetworks story – let’s step back in time. In 1994, a former Microsoft employee, Rob Glaser, founded a startup that made software. A year later, the company launched its RealAudio solution, considered the foundation stone of streaming. In 2001, when Netflix still only rented DVDs, the company introduced a paid subscription video service, RealOne. The subscription unlocked access to a library of premium content provided by ABC News and CNN. Then in 2003 came the launch of Rhapsody – the first subscription music streaming service in the United States – with a library of 500,000 songs through license agreements with music industry heavyweights. But paid streaming services were only in their infancy in those days, and the company was hit hard by the development of YouTube (Google), iTunes (Apple) and Windows Media Player (Microsoft). RealNetworks then spent over a decade wandering the desert.
But in 2012, its subsidiary Rhapsody bought music streaming site Napster. Instead of taking on Spotify, Rhapsody refocused Napster on selling its technology under a white label. Its infrastructure became the base for streaming services such as iHeartRadio. That strategic move turned out to be a good one. Rhapsody has been turning a profit every quarter since 2018. Does that mean RealNetworks, which owns 84% of Rhapsody, should be revived? The markets aren’t there yet. The company’s capitalisation half melted away in 2019 to $55 million, down from nearly $3 billion when the internet bubble was at its biggest.
Still unknown in Europe, Roku has made a place for itself in the United States in an industry normally dominated by giants such as Google and Apple. What does it do? Its connected box lets users watch a wide selection of web content on a television set. Basically, through its partnerships with streaming operators such as Netflix and Hulu, the Roku system makes switching from one service to another almost as easy as changing the channel.
With all the SVOD platforms on the market, analysts expect that consumers will increasingly have several subscriptions going at the same time. And Roku would benefit from that. The majority of analysts recom- mend buying shares, forecasting revenue growth from $743 million in 2018 to $1.6 billion in 2020.
Who remembers Pandora? When the platform launched back in 2000, it was a pioneer in music streaming with its web radio service that adapted to listeners’ music tastes. But Spotify drove Pandora into the red. In September 2018, Sirius, the US satellite radio leader, decided to buy the company for $3.5 billion in a bid to convert to streaming.
- Foundation: 1946
- Headquarter: MINATO (JP)
- Revenues: $78.1 BN (2019)
- Effectives: 114'400
The inventor of PlayStation was one of the first to take on the concept of cloud gaming. PlayStation Now, which officially launched in 2017, allows gamers with a PC or PlayStation 4 to stream games from the PlayStation catalogue for a monthly fee without having to install them. The fluidity of the experience is directly dependent on the speed and stability of the user’s internet connection.
With 113 million paid subscribers, surging 31% in the past year, Spotify is hands down the world leader in music streaming, ahead of Apple Music (60 million users) and Amazon Music (55 million). However, unlike its colleagues, the Swedish company cannot hide its losses behind other business activities. Although the company has significantly improved its profitability, it still lost €78 million in 2018.
Listed in New York since 2018, Tencent Music owns the three largest Chinese music streaming services: QQ Music, Kugou and Kuwo. True, QQ Music’s user base is developing, but Tencent Music’s growth is mainly driven by its social entertainment services, including its karaoke platform WeSing, and its Kugou Live and Kuwo Live apps where users can watch livestreams of concerts and TV shows.
In December 2019, the conglomerate Viacom and the network CBS combined their strengths to become ViacomCBS. According to the Swiss bank UBS, this merger will enable the group’s two VOD services (CBS All Access and Pluto TV) to rival Netflix and Disney, thanks to the $13 billion that the group could spend on creating content, compared with the $15 billion spent by Netflix in 2019. Moreover, ViacomCBS has an enormous library of 140,000 shows including CSI, Criminal Minds and The Big Bang Theory.
World Wrestling Entertainment specialises in organising entertainment events, primarily in wrestling. Now WWE has its own streaming service, WWE Network. However, the number of subscribers to the platform fell in 2019, as did the group’s share.