The global Over-The-Top (OTT) streaming market competition is intensifying.
After witnessing Netflix's success during the pandemic, more and more players are entering the online streaming business. However, as the pandemic dividends started to dry up, many companies are facing operational challenges and are forced to make changes.
Disney teams up with Warner Bros. to launch streaming bundle
Recently, the OTT industry was shaken by the shocking announcement that Disney and Warner Bros. Discovery are teaming up to offer a bundle of their video platforms.
Consumers can subscribe to a packaged plan that includes Disney+, Hulu, and Warner's Max. According to market sources, this package will be available in the US in the summer of 2024, with both ad-supported and ad-free versions. It's clear that this alliance was formed to challenge Netflix's market dominance.
Despite being in strong competitive positions and owning multiple well-known IPs, Disney+ and the Warner Bros. Discovery group still find themselves chasing behind Netflix, which remained the primary choice for most OTT subscribers. With most audiences having limited viewing time, Disney and Warner have had rumors about operational issues or potential reforms. Disney has already undergone multiple rounds of layoffs to address losses.
This bundled marketing strategy has garnered attention because both companies are powerful competitors in the OTT industry, with numerous popular IPs and high-demand shows.
As both parties reached an agreement, sources familiar with the OTT industry insiders stated that this move is like forming another OTT giant. Previously, many consumers preferred subscribing to Netflix due to its diverse and consistently high-quality content.
If consumers can subscribe to a package offering content from Disney+, Hulu, and Max at a reasonable price, it could be a significant incentive and a potential turning point in the battle against Netflix. Warner Bros. Discovery commented that the new service aims to provide consumers with simpler choices in the streaming and entertainment sectors amid the overwhelming market.
Transitioning from Competition to Collaboration
Collaborations among OTT players are not new. Paramount previously collaborated with Apple on streaming platforms. The competitive landscape of the OTT market is gradually changing from a model of isolated content and platforms to collaborative efforts to increase competitiveness against Netflix.
At the same time, from a content investment perspective, offering exclusive content to one's own platform is not a viable business model if it doesn't significantly boost subscriber numbers. Rather, expanding licensing to increase audience reach and easing inter-platform licensing restrictions could lead to market growth, and the costs of content investment could potentially be recouped for investment in future content.
This explains why Disney and Warner Bros. Discovery are willing to "let bygones be bygones" and join forces. Analysts noted that Netflix faced challenges with slowing subscriber growth and even declines in 2022 and 2023. However, after adjusting its business strategy and embracing ad-supported plans, its overall operations improved. Thus, for other companies, collaborating with secondary competitors to challenge the primary one might be a necessary decision to make.
