Netflix's position as the dominant player in global streaming is under serious threat for the first time, warns an expert in television studies.
John Cook, Professor of Media at Glasgow Caledonian University, predicts increased competition from rivals such as Amazon, Apple, YouTube Premium, HBO and Disney could wreck the business model of the online entertainment giant.
Speaking at the UK conference State of Play: Critical Studies in Television, he said Netflix may go down in history as a 'game changer' and 'disruptor', which led the way in streaming only to be ultimately overtaken.
The service has around 130 million subscribers worldwide and plans to spend more than £6 billion on content alone this year.
However, subscriber growth has slowed and it has taken on billions of dollars’ worth of long-term debt to fund its rapid expansion.
Professor Cook, who specialises in television history, drama, documentary and film, said: “It is possible Netflix, in the long run, may prove to be the case of a classic bubble.
“Rising content cost, long-term debt liabilities; falling revenues, and fiercer competition from big, established players. The future may belong to other bigger players with deeper pockets and fewer long-term debt problems.”
Formed as an online DVD service in 1998, Netflix moved into streaming with the advent of broadband and started producing its own shows in 2013. International hits include House of Cards, Orange is the New Black and The Crown.
It has faced increased competition in the UK from rivals such as Amazon Prime and YouTube Premium. Apple is planning to launch its own video streaming service and Disney Play, which will showcase animation and Marvel titles, is set to launch in 2019.
Professor Cook added: “Netflix at the moment is throwing money at all the new original content it can, 700 original TV, film and stand-up comedy projects this year, investing in ‘banker’ long-form fiction series like ‘Stranger Things’ and ‘Lost in Space’ that it hopes will retain customer loyalty when serious streaming competition starts.
“Unlike all the big corporations which are highly diversified and where streaming and content production are not the core business, this is all that Netflix has got. Hence big corporations can afford to cross-subsidise expensive fiction content production from their revenues elsewhere.
“Netflix’s legacy may be as a pathfinder pointing the way, even though in the end, it may not end up as the ultimate winner of the race.”
State of Play: Critical Studies in Television was hosted at Edge Hill University, in Ormskirk, north of Liverpool, in conjunction with the Television Studies Section of the European Communication Research and Education Association (ECREA).