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Over the course of several weeks in late October / early November, my girlfriend and I watched the eight Harry Potter movies. As young people in 2020, we don’t own a DVD player, so we decided to stream the movies.

Here’s what streaming platforms we used to watched them:

#1: Peacock (free with ads)
#2 & #3: Prime Video ($3.99/movie)
#4 & #5: IMDB TV (free with ads)
#6 – #8: Prime Video ($3.99/movie)

Why did we watch the movies on so many different streaming services? Because content is constantly shifting between platforms, as you may have noticed with other hits such as Friends (Netflix to HBO Max) and Parks & Rec (Netflix to Peacock).

In our case, per licensing agreements with Warner Bros. (creators of the Harry Potter films), Peacock owned the rights to Harry Potter through Halloween. When Peacock lost the rights, the series experienced a transitional period in which it made its way across several streaming platforms.

While the ownership rights to Harry Potter are especially complex, those to other content are typically much simpler. At the end of the day, two factors determine where your favorite show is streamed: 1) corporate structures (who actually owns the content) and 2) licensing contracts (who is allowed to streamed it).

With this post, I hope to provide a broad context behind the history of the video streaming industry, explore who actually owns content today, and understand why your favorite show keeps switching between streaming platforms.

A quick foray into TMT

“TMT” or Technology, Media, and Telecommunications, is the broader industry that streaming falls under. To understand streaming, it’s important to understand the larger industry. While tech, media, and telecoms are grouped together, people often break TMT into two segments: 1) tech (e.g., Apple, Alphabet, Facebook) and 2) media/telecoms (e.g., Disney, AT&T, Verizon).

In the past, media and telecoms providers were separate. “Media” was the label for content producers, such as movie & TV studios, while “telecoms” was the label for content distributors, such as wireless & fixed line telecommunications companies. However, over the last 15 years, this industry has been characterized by a significant amount of consolidation, both within media and telecoms individually and between the two industries.

These mergers across industries started in 2011 with Comcast, a distribution company, and its acquisition of NBCUniversal, a production company. AT&T, a distribution company as well, followed suit in 2018 with its purchase of the production assets of Time Warner Cable (Warner Bros., HBO, and Turner).

Let’s take a look into the top players in media, both within movie studios and TV studios:

My main takeaway from these charts is that content ownership is super complex within media, especially within movie studios. Here are some interesting ownership tidbits you may not have known:

Disney owns ABC, ESPN, and two separate streaming platforms (Hulu and Disney+)
AT&T owns HBO Max
Comcast owns NBC, Universal Studios, Peacock, and the Philadelphia Flyers hockey team
3 of the top 6 movie studios (Warner Bros., Universal Pictures, 20^th Century Studios) operate under different ownership now than they did 10 years ago.

On the distribution side, there are two categories of services: wireless and fixed line telecommunications.

“Wireless” telecommunications companies would be the companies you likely think of when you hear the word “telecommunications.” These companies, such as AT&T, Verizon, and T-Mobile/Sprint, provide telephone & internet service for wireless devices, most notably cell phones.

On the other hand, “wired” or “fixed line” telecommunications companies provide internet, cable TV, and landline phone services for houses and business via wires in the ground. Notable brands in this space include Xfinity (a Comcast brand) and Spectrum (a Charter Communications brand).

Let’s take a look into the top players within each segment:

While you may wonder why your cell phone company or cable company is being discussed in this post, they actually play a big role in streaming, for AT&T owns HBO Max, Comcast owns Peacock, and Verizon has deals with Disney to provide Disney streaming platforms to Verizon customers.

Dipping your toes into the history of streaming

2014

Picture yourself back in 2014 (oh a time we all crave today). Things were simple in the streaming world. Three main streaming platforms existed (Netflix, HBO, and Hulu), but practically all of the best content could be found on Netflix, with the exception of Game of Thrones on HBO and recent episodes of live shows on Hulu.

While things were easy for you, Reed Hastings (CEO of Netflix) did not share this sentiment. Long before the so-called “Streaming Wars,” Netflix identified how precarious its position was. This was because Netflix ran a distribution business with no defensible access to content. In fact, almost all of its most-watched content (The Office, Friends, Seinfeld, Parks & Rec) was owned by other companies that could feasibly enter the streaming space themselves.

What did this position mean for Netflix? Just as easy as their top content was licensed, it could all be taken away within five years.

To underscore the seriousness of this position, a 2018 survey found that nearly half of younger Netflix subscribers (18-29 year olds) would cancel their account if “The Office,” “Friends,” Disney, and Marvel movies were removed. This would be absolutely catastrophic for Netflix. By January 1^st of 2021 when “The Office” leaves Netflix for Peacock, this hypothetical will have become fully realized.

In 2014, Netflix started a high-profile business pivot (its second prominent pivot in its lifetime) from a distribution company to a media/distribution company. Unwilling to settle, Reed Hastings and Netflix decided to invest an enormous amount of money to create their own content.

2020

Jump forward to today. Over the last five years, content owners such as Disney, AT&T (through WarnerMedia) and Comcast (through NBCUniversal) realized that their libraries were deep enough to build competing streaming platforms (Disney+, HBO Max, and Peacock, respectively). Additionally, titans of the tech industry threw their hats in the ring, with the entrance and growth of Prime Video (Amazon) and Apple TV+ (Apple).

Over time, just as Netflix had predicted, content creators decided not to re-license their content with Netflix when their contracts expired. This decision has led to many of the aforementioned content shifts from Netflix to other platforms.

Today, Netflix has gone all in on content production. In 2019, Netflix averaged adding ~8 hours of original content per day onto the platform. With the help of its massive investments into content creation, Netflix has created formidable original content, including top shows such as Stranger Things, The Witcher, and Black Mirror.

Will Netflix win in the end? It’s tough to say. While Netflix is the industry leader with its distribution platform and content algorithms, it’s playing catchup on building out a full library of original content. Netflix is burning through cash to build out this content, and they’re facing far bigger and better funded competitors, such as Comcast, Disney, Amazon, and Apple.

No matter what, though, you have to admire Netflix’s foresight in 2014 to see all of this coming.

Where your favorite content lies

With a background on the industry and history lesson on streaming under the belt, it’s time to actually look at who streams content.

Remember, two factors dictate who streams content: 1) corporate ownership (who owns the content) and 2) licensing contracts (who is allowed to stream it). In these descriptions, you will see that many platforms stream both owned and licensed content. However, as licensing contracts expire over time, you should expect to see more media companies (NBCUniversal, Disney, WarnerMedia) choose to stream their content on their own platforms rather than license it out to other platforms (such as Netflix).

Standalone streaming services

Netflix (~195M subscribers)
- Parent company: Netflix
- Content: Netflix originals (e.g., Stranger Things, The Witcher, and Black Mirror), licensed content from almost every major movie and TV studio (less now from Disney, NBCUniversal, and WarnerMedia as they slowly shift content onto their own platforms)
- Price: $9/month one stream SD, $14/month two streams HD, $18/month four streams HD/4K UHD

Content arms of production companies

Disney+ (~87M subscribers)
- Parent company: Disney (who owns Walt Disney Studios, Pixar, Marvel, Lucasfilm, Twentieth Century Studios, ABC & other ABC branded channels, ESPN, Freeform, and FX)
- Content: Disney movies & TV shows, Pixar, Marvel, Star Wars, National Geographic
- Price: $7/month ($8/month starting in March 2021)
Hulu (~37M subscribers)
- Parent company: Disney (who owns Walt Disney Studios, Pixar, Marvel, Lucasfilm, Twentieth Century Studios, ABC & other ABC branded channels, ESPN, Freeform, and FX)
  - Quick aside: Over the last 10 years, Hulu has had one of the most complex and dynamic ownership structures that I have ever seen. Basically, big content producers (Fox, ABC, NBC, Disney) originally both invested in Hulu and used Hulu to distribute recent episodes of their content. Now, however, Disney owns most of Hulu, but Hulu still distributes content from non-Disney production companies due to licensing contracts.
- Content: Hulu originals, FX, Freeform, ABC, licensed content from WarnerMedia & NBCUniversal & CBS
- Price: $6/month with ads, $12/month without ads
Peacock (~22M subscribers)
- Parent company: Comcast (who owns NBC & other NBC branded channels, Universal Pictures, USA, Telemundo, E!, Syfy, Bravo, Golf Channel)
- Content: NBC shows (e.g., The Office and Parks & Rec), shows from other owned channels (e.g., USA, Bravo), Universal Pictures films, DreamWorks films, Peacock original content
- Price: Free with ads for limited content, $5/month with ads for all content, $10/month for all content ad-free
HBO Max (~13M subscribers)
- Parent company: AT&T (owns Warner Bros. Movies & TV, CNN, TBS, TNT, Cartoon Network, TruTV)
- Content: Max originals, previous HBO content, Warner Bros. movies & TV (e.g., Friends), Universal Pictures & 20^th Century Studios content (through 2022 – will then move to Peacock or Disney+/Hulu respectively), potentially live TV
- Price: $15/month

Other streaming services

Prime Video (~150M Amazon Prime subscribers)
- Parent company: Amazon
- Content: Amazon Originals (e.g., The Boys, Jack Ryan, Marvelous Mrs. Maisel), licensed content, lots of content available for purchase
- Price: $9/month or free with Amazon prime ($120/year)
- Larger strategy: Amazon’s core product is not Prime Video, but Amazon Prime. They view Prime Video as one of many “perks” to Amazon Prime (shown here), but do not inherently invest the same amount of time, focus, or money as a company such as Netflix does. While Amazon is going big on streaming, they are still investing far less than Netflix.
Apple TV+ (~35M subscribers)
- Parent company: Apple
- Content: Apple Originals (e.g., The Morning Show, Greyhound), small number of licensed or acquired titles
- Price: $5/month
- Larger strategy: Like Amazon, Apple’s core product is not its streaming service. Instead, Apple treats Apple TV+ as more of a “perk” to support its other business units. There are two examples of this that I see:
  - First, Apple includes a free year of Apple TV+ for people that buy an Apple device. This is an obvious “perk” to prop up device sales.
  - Second, Apple TV+ is included in Apple One, Apple’s new subscription service for some of its products. This is largely an attempt by Apple to move its business to more of a subscription model, as opposed to the current hardware purchase model. In my mind, Apple is mainly thinking of Apple TV+ as another value-added service for its subscription bundle.

Parting thoughts

In 1996, Bill Gates wrote an essay titled Content is King. While he wasn’t referring to video streaming, his words carry strong weight in this industry today. 15 years of massive consolidation in this industry reflects companies grappling for access to content. Because content determines users. Content determines pricing. Content determines everything.

What do you think will happen in the future?

Can Netflix win in the end, or will it have to be bought by (or buy for itself) a production company? Should Disney combine Disney+ and Hulu? Will there be a natural consolidation in the number of streaming services? Will services that bundle streaming services rise to prominence?

Only time will tell. But for now, you still have 4 days to binge all 9 seasons of “The Office” before it leaves Netflix!

The Wild West of Video Streaming