How Netflix won the streaming wars despite Disney, Apple, Warner Bros competition and 2023 strikes: home of Stranger Things, Squid Game has silenced critics

As a result, many analysts have made a bold proclamation in recent months. The so-called streaming wars are over, they say. Netflix has won.

As evidence, they point to rival studios that are now licensing more of their programmes to Netflix, including HBO’s Six Feet Under and Insecure, after years of holding on to their big action movies and popular shows for their own platforms.

“Their competitors are so desperate to make money, they’re giving this content to Netflix,” says Jeffrey Wlodarczak, chief executive of investment adviser Pivotal Research Group. “This is what winning is.”

How Viu is remaking global hits for Asia – Korean dramas especially

But how did Netflix defend its bulwark when there are still multiple streaming services fighting for eyeballs?

Netflix also diversified its content beyond scripted programmes, adding more reality shows, non-English-language originals, live television, games and sports documentaries to its mix.

And it expanded its sports-related content. In January, the streaming giant announced it would become the exclusive host to WWE’s weekly pro wrestling show Raw in 2025, which analysts say will help boost Netflix’s advertising business and increase WWE’s global reach outside the United States.

“Introducing it to a new set of fans as well as servicing the existing fans that are either already Netflix subscribers, or will come over, to me either way is a win,” Brandon Riegg, vice-president of nonfiction series at Netflix, said at a press event in Hollywood in January. “The truth is we don’t know how much bigger it can get. I think we’re all really bullish on it.”

A significant factor in Netflix’s lead is that it had a major head start, having entered the streaming arena in 2007, much earlier than many of its Hollywood competitors.

The company also built a robust platform with recommendations based on a user’s past viewing habits, with trailers and titles promoted tailored to their tastes.

After Big Bet, bigger bets on local content: streaming TV in Asia-Pacific

“They built scale quicker than anybody else, and that scale in turn leads to a shorter road for a new original to become a hit because they have such a wider audience available to sample,” says Brandon Katz, industry strategist for data science company Parrot Analytics.

“They have done a very good job of maintaining their market-leading position in the streaming industry, even as competition and macroeconomic industry factors have thrown a lot of challenges at them.”

Meanwhile, Wall Street started to turn on legacy media companies including Disney, Paramount and Warner Bros Discovery, which had sacrificed traditional television and box office revenue to fuel their streaming ambitions. Stock market pressure encouraged those businesses to rein in their spending on direct-to-consumer operations.

Disney+ has 111.3 million subscribers as of the first quarter of the current financial year (excluding Disney+ Hotstar). Warner Bros Discovery counts 97.7 million subscribers in its direct-to-consumer category, which includes Max, HBO, Discovery+ and premium sports products in the fourth quarter of the last financial year.

The strikes by writers and actors raised concerns about streaming services, as they blasted Netflix and others for not rewarding them enough financially when programmes became hits. They demanded more data transparency and substantial increases in pay.

The Writers Guild of America and SAG-AFTRA were able to achieve many of their aims in their new contracts. Nonetheless, Netflix continued to increase its subscriber base during the strikes.

One of the titles that gained traction on Netflix over the summer was the legal drama Suits, a USA Network series that ran from 2011 to 2019 but gained a new surge of cultural relevance last year when it appeared on the service.

Netflix posts best customer gain since surge during pandemic

Production overseas also helped, as it is usually less expensive than producing programmes in the US, analysts said.

“The more they’re able to get some of that South Korean programming, Indian programming, Spanish-language programming, to really kind of pop on the charts here in America, the longer their dollar goes, the less they have to rely on more costly American-made series.”

But as Netflix continues to expand its customer base, it will face ongoing competition for customer time and money. Some analysts remain sceptical about the return on investment from the company’s movie strategy, which was a 70-movie schedule in 2021 and included big-budget, blockbuster-type action movies like Red Notice.

In January, Netflix announced its film chief, Scott Stuber, was leaving in mid-March to start his own media business. His role will be filled by Dan Lin, chief executive of production company Rideback, starting in April.

But Netflix has downplayed the notion that the company’s approach to original film is changing. Spencer Neumann, Netflix’s chief financial officer, said having original films on its service is an important part of the entertainment that Netflix provides and the value it delivers to its customers.

“The film business has come a long way. It’s a nice success for us,” he said. “With Dan, we’re excited to take it to the next level. Just like everything we do, we’re trying to continue to improve, so we’re gonna build from there.”