Streaming services witnessed massive growth in engagement levels last year amid the COVID-19 pandemic. Several new players have entered the market while existing players have maintained their foothold. Netflix Inc. (NASDAQ: NFLX) continues to rule the roost while Walt Disney’s (NYSE: DIS) Disney+ and AT&T’s (NYSE: T) HBO Max have grown rapidly, smashing projections years in advance.
Netflix ended Q4 2020 with 203.6 million paid memberships, reflecting a year-over-year growth of around 22%. In Q4, paid net additions totaled 8.5 million, surpassing the guidance of 6 million net adds. For full-year 2020, paid net additions were 37 million, up 31% from 2019. In 2020, 83% of the company’s paid net adds came from outside the US and Canada region and the Asia-Pacific region saw a 65% YoY growth in paid net adds.
In just over a year after its launch, Disney+ surpassed its initial guidance range for subscriber additions. After ending its most recent quarter with 94.9 million subscribers, at its annual shareholder meeting earlier this month, Disney stated that its Disney+ streaming service has surpassed 100 million subscribers.
AT&T’s HBO Max shares a similar story. In 2019, the company said it expected to reach 41 million HBO Max and HBO subscribers in the US by the end of 2022. At its Investor Day earlier this month, AT&T said it has surpassed this guidance range two years ahead of plan with 41.5 million subscribers in the US at present.
AT&T said that HBO Max not only helped cover the drop in linear HBO subscribers but also drove growth, managing to bring in more subscribers in just a few months than what HBO had added over the past decade.
According to a report by Cord Cutters News and data from Hub Research, 77% of people are watching more TV now than before the pandemic. Viewing TV content through streaming increased during the pandemic period. Netflix was the leader with 71% of viewers opting for the platform while HBO Max doubled its share from 15% last July to 31% this February.
Netflix continues to ramp up its local original content slate. Its original shows such as Lupin are popular not only in their home countries but are well-liked in other regions as well. In 2020, of the 10 most searched shows globally, nine were from Netflix. The company has more than 500 titles in the pipeline and plans to release at least one new original film every week in 2021.
Disney is planning to launch a number of new episodic series, feature films, documentaries, and specials on Disney+ in the coming years. The company is targeting 100 plus new titles per year including Disney Animation, Marvel, Star Wars and National Geographic.
AT&T plans to launch movies from Warner Bros. Motion Pictures both in theaters and on HBO Max simultaneously this year. The company has a strong slate for 2021 which includes Godzilla versus Kong, Mortal Combat and the Matrix. Apart from this, the company has a number of shows and documentaries in the pipeline.
Looking ahead, even though the momentum in subscribers and engagement levels are likely to moderate once the pandemic subsides and things go back to normal, there is still room for significant growth.
According to a report by Grand View Research, the global video streaming market size was valued at $50.1 billion in 2020. It is projected to grow at a compound annual growth rate of 21% from 2021 to 2028. Revenues are estimated to reach $223.9 billion in 2028.
Netflix has projected global streaming paid memberships to grow nearly 15% YoY to 209.6 million in the first quarter of 2021. The company expects paid net additions of 6 million in Q1. Disney expects to have between 230-260 million total paid Disney+ subscribers globally by the end of FY2024.
AT&T plans to launch HBO Max in 39 international markets this summer. In the second half of 2021, the company plans to launch the service in 21 countries across Europe. AT&T expects to end this year with 67-70 million subscribers globally. Looking at its position in the US and its expectations for Europe and Latin America, the company raised its outlook for these initial launch markets to 120 million worldwide subscriptions by 2025.
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