Netflix has long relied on distribution deals with telcos to push its streaming service to more customers, but may soon have to fight for operators’ attention as new streaming services from Apple and others launch in 2019.
Greg Peters, Netflix chief product officer, noted on the company’s Q4 earnings call that “by including the Netflix subscription in a package of either their mobile subscription or pay-TV subscription, we can make it just super, super simple for those folks to get to know Netflix”.
But independent telecoms analyst Paolo Pescatore told Mobile World Live new streaming services launched this year will pursue similar deals as they aim to grow their audiences, which in turn could push Netflix to the backburner. Apple, T-Mobile US, AT&T and Disney are among those scheduled to launch new video offerings sometime in 2019.
“Everyone will try to get into bed with the telcos,” Pescatore said. “Until now they’ve relied on telcos to sell and market Netflix. But with the explosion that’s going to happen with big tech giants and others launching, Netflix is starting to take a back step while these other SVOD services are primed and in focus in people’s eyes.”
He added the pressure could prompt Netflix to look for growth by expanding in other directions, for instance moving into adjacent services such as gaming and e-sports.
Netflix continues to generate massive revenue, growing the figure 27 per cent year-over-year to $4.2 billion in Q4, but its decision to spend big on original content means the company is operating on slim margins. In Q4 it posted profit of $134 million, down from $184 million in Q4 2017.Subscribe to our daily newsletter