Netflix faces new competition as former media companies show flexibility

Something strange is happening in the world of technology and media: Netflix is ​​becoming the incumbent operator and the new competitors are companies that have been around for almost a century.

Disney, WarnerMedia of AT & T and NBCUniversal of Comcast are all launching streaming services directly to consumers by the first quarter of 2020. They will all come after Netflix.

Of course, Netflix will have enough money to keep its large subscriber base growing, with 155 million subscribers worldwide. But there is little doubt that traditional media companies are particularly motivated to adopt subscription streaming services to capture some of the value of Netflix – or to bring CEO giant Reed Hastings to life.

That's why WarnerMedia announced Tuesday that it was withdrawing Netflix's "Friends" in 2020 when creating its service, which will be called HBO Max. The WarnerMedia streaming service will have exclusive rights to the successful sitcom. According to someone familiar with this topic, AT & T pays $ 85 million a year for US rights for five years. Netflix was paying $ 80 million for the worldwide rights of the series and was not able to make a new offer, given WarnerMedia's contractual options for streaming rights for the series, said the manager. . The Wall Street Journal first announced how much WarnerMedia would pay for "Friends".

Netflix was preparing to lose "Friends" just when he realized that he could lose "The Office" to NBCUniversal's streaming service, which will take place in 2021, and spent billions of dollars in new exclusive content exclusive to the service to satisfy its customers.

But losing both "Friends" and "The Office" is important for the potential health of the streaming service. Both series are the two most watched Netflix shows, according to research firm Jumpshot.

The goal of WarnerMedia's CEO, John Stankey, is to have 70 million subscribers join HBO Max. That's double the number of US subscribers for HBO. For years, Wall Street has evaluated Netflix on the growth of its subscribers rather than its profits. Traditional media companies have corrected this dichotomy, frustrated by the fact that investors value former media outlets over Netflix, which has grown from a start-up to a $ 175 billion company. .

But now, the old empire has a chance to fight back. Disney, AT & T and Comcast all have a business value exceeding $ 300 billion. They all have the opportunity to design a product that offers consumers a new, easy-to-use service that shows the movies and TV shows they have to offer.

Disney has already given investors a taste of what Disney + will look like during a day dedicated to investors earlier this year. The service will divide Disney family content into brands – Pixar, Marvel, Disney, Star Wars and National Geographic – and allow users to find programs within these ecosystems.

WarnerMedia plans to present its service at an event in October. NBCUniversal has not yet announced its intention to give consumers a taste of what its product might look like.

While Netflix disrupted traditional pay TV by offering content at a much lower price than cable (about $ 13 per month versus $ 100 per month), traditional media companies were now playing Netflix. Disney +, which will be launched on November 12, will cost only $ 6.99 per month. HBO Max is expected to be between $ 15 and $ 18 a month, according to people familiar with the subject. It's almost the same price as HBO costs. And the streaming product of NBCUniversal will be free for pay-TV subscribers and about $ 10 for cord cutters, although it is backed by commercials.

These are more Netflix-compliant prices, offering consumers a choice of which streaming services to retain and reject.

Beyond price differences, traditional pay TV suffers from poor user interfaces and unwanted content loads.

In the case of fate, browsing issues and unwanted type content have become issues for Netflix, which has spent so much on programming that the service is flooded with options, including many shows and movies that do not are not very good or appeal to a niche audience, just like the wiring harness.

Netflix can have such a big advantage on the first come that it does not matter. The growth prospects of the company are in any case largely international. But mainstream media companies find themselves in a situation they probably never imagined what would be a decade ago: early disrupters.

Disclosure: Comcast owns NBCUniversal, the parent company of CNBC.

Watch: "Friends" to switch from Netflix to the new HBO Max streaming service.