ESPN also gets into streaming big time, sending cable providers into terminal decline.
HBO Now Expands:
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When it comes to streaming, the past 12 months were poetically bookended: Netflix opened 2016 by announcing it was expanding to a total of 190 countries, while Amazon closed it with a similar expansion of Prime Video to 200 countries.
The implications are obvious – in 2017, the battle for streaming supremacy will be fought globally between two well-resourced companies. Netflix is spending $6 billion (U.S.) on original content while Amazon is estimated to be spending a similar amount.
While Netflix has the clear leadership position thanks to a healthy head-start, Amazon adds a unique proposition in many bigger markets with its Prime shipping service. The company intends to use video streaming as a way to encourage subscribers to shop on its website. It’s genius, and it works.
All of this means it’s reckoning time for HBO. The network has designs on being a global content powerhouse, but so far has focused its streaming effort – HBO Now – on the United States. Streaming rights in other countries for much of its content have been parcelled out to third parties, such as Bell in Canada, to do with as they will.
That position is going to have to change because of two factors. One is the internet’s mantra of “grow big fast” – if you want to be a player online, you have to dominate quickly before competitors can rise up to challenge you.
It’s possible that Netflix has already grown too big to catch, but HBO will certainly have a hard time getting traction if Amazon similarly entrenches itself. Many households are likely to subscribe to two video streaming services, but will they be willing to add a third?
HBO also needs to unhitch itself from cable providers, a veritable endangered species. Cord-cutting has been accelerating and the presence of another quality streaming service in the form of Amazon is only going to speed that up even more.
The way forward is clear: HBO needs to take control of its own destiny and get into streaming in a big way. Waiting much longer will only make it more difficult in the long run. The alternative of sticking with cable providers is like taking a ride on the Titanic.
The same goes for the likes of ESPN and other network brands. The coming year will be the tipping point where any remaining holdouts finally get into the game with their own streaming services, independent of cable providers. Looking ahead a few more years, it’s likely that cable providers will cease to exist entirely.