Recently, there was an article citing that Netflix will fall from 85 percent to 50 percent of the market in 2018, yielding ground to the various OTT players that are popping up with regularity.
Alphonso does not contest the fact that the market will get crowded. However, we do not think that Netflix will lose its preeminent position and lose a chunk of the market by 2018. There are several reasons why we don’t think this will happen:
What we feel will happen is that the rest of the market will be splintered across several properties, each providing value in a small niche.
Based on the data we gather at Alphonso, we’ve noticed that consumers spend enormous amount of time watching Live and Sporting Events as compared to any other category. This makes sense, as live events have an element of surprise that gets lost unless you view it as it happens. Even for sports, team loyalty and preferences trumps the need to be entertained for a vast number of viewers, with the result that sports draws in a lot more viewers than any other category.
From our knowledge base, the market will get segmented into four parts:
The other OTT players and traditional TV channels would own Live Events and Netflix with ownership of Re-runs and Other content.
The market for new shows is where there will be an interesting fight with traditional TV channels and their OTT brethren having the lead and Netflix fighting hard to gain ground. However, with Netflix’s strong analytical data, we are certain Netflix will come up with good original content to help retain its preeminence in the OTT space for a very long time to come.
All in all, it will be an interesting few years.