How Major Streaming Platforms Are Navigating New Challenges

Facing Competitive Pressures

Despite intense competition, Netflix maintains healthy engagement, while Disney strategically withholds future plans to avoid giving competitors an edge. Apple acknowledges the market's competitiveness, and Netflix anticipates additional challenges from paid sharing and AVOD CPM pressures, considering potential pricing adjustments for ad-supported tiers.

"But despite that impact and despite the general pressure from strong competition that Ted noted, we think our engagement remains healthy." --- (NFLX, earning call, 2024/Q1)

"I don't like to get ahead of the next year until we get to the next year. And in addition to that, from a competitive perspective, I'd rather not give my competitors the pathway on exactly how we're -- how and when we're going to achieve the margin goals we're looking to achieve." --- (DIS, earning call, 2024/Q2)

"I think it has been and is through last quarter, the most competitive market in the world." --- (AAPL, earning call, 2024/Q2)

"So beyond that, kind of the competitive intensity that's always been out there, we also anticipated some headwinds in our engagement because of paid sharing." --- (NFLX, earning call, 2024/Q2)

"Spencer Wang: Thank you, Greg. From Steven Cahall, his question is, given what we think are pressures on AVOD CPMs and the 10 hours per account per month viewing time you disclosed at the upfront for ad-supported members, what's the likelihood that ad support ARM drops below ad-free member arm in the second-half? Would you consider raising the price of ad-supported tiers as an offset?" --- (NFLX, earning call, 2024/Q2)

Adapting to Regulatory Changes

Major streaming platforms like YouTube, Netflix, and Amazon Prime Video are proactively adapting to evolving regulatory landscapes by enhancing compliance measures, improving disclosures, and fostering adaptability to thrive despite regulatory changes.

"As the regulatory landscape continues to evolve globally, failure to comply with relevant regulation may lead to significant risk to the company." --- (GOOG, event transcript, 2024/06/07)

"And we want to build a company that can adapt to those changes and thrive regardless of the circumstances." --- (NFLX, conference, 2024/05/15)

"Supporting proposal 17 will protect our workforce, ensure regulatory compliance and enhance our reputation." --- (AMZN, event transcript, 2024/05/22)

"On these important issues and many more, we have continued to thoughtfully add to and enhance our disclosures independent of the stockholder process. We recognize that the submission of proposals for vote at our Annual Meeting is one mechanism for our stockholders to convey their priorities and perspectives, and we carefully evaluated each proposal, considering alignment with our long term interests and existing goals." --- (GOOG, event transcript, 2024/06/07)

"As long term shareholders we want Alphabet to succeed over the long run which means our company must do what it can today to mitigate the generative AI risks of tomorrow not only the risk to society but to the company itself regulatory risk, legal risk, reputational risk, these are only a few and while Alphabet touts its current reporting we've only seen principles and platitudes." --- (GOOG, event transcript, 2024/06/07)

Utilizing Technological Advancements

Streaming platforms are leveraging technological advancements to enhance user experience and operational efficiency. Amazon Prime Video is optimizing ad spending and engagement, Disney+ is focusing on personalized subscriber communication, Netflix is refining recommendation systems, Apple TV+ is introducing new features, and YouTube is advancing video understanding and visual search capabilities.

"This advancement leads to more efficient ad spending and higher customer engagement levels, transforming how ads are crafted and delivered." --- (AMZN, press release, 2024/06/13)

"And the reason they're too high is because we didn't build in the technology to have not only the algorithms, but the ability to send very, very highly customized messages to our subscribers when we believe they're potentially at risk." --- (DIS, conference, 2024/05/15)

"These technologies are the foundation for our recommendation systems that help us find these largest audiences for our titles and deliver the most satisfaction for our members." --- (NFLX, earning call, 2024/Q1)

"We shared powerful new features and advancements to our 6 incredible platforms." --- (AAPL, service launch event, 2024/06/10)

"Thanks to advancements in video understanding, we can take visual search to a whole new level with the ability to ask questions with video." --- (GOOG, AGM, 2024/06/07)

Boosting User Engagement

Major streaming platforms are boosting user engagement through improved user experiences, new structural benefits, recommendation engines, compelling content, and AI-enhanced search features, particularly among younger users.

"We see an increase in engagement, but I see this as something which will play out over time, but if you were to step back this moment there were a lot of questions last year, and we always felt confident and comfortable that we would be able to improve the user experience." --- (GOOG, earning call, 2024/Q1)

"This is -- our expectation is that this new structure will allow us to deliver as the old structure did for a decade, multiple repetitive material benefits to users in terms of engagement, which lead into retention and then revenue. But again, that will be a long" --- (NFLX, earning call, 2024/Q2)

"In addition to that, things like recommendation engines obviously increase engagement because people are getting more of a sense of what it is that they want to watch based on the suggestions that we make." --- (DIS, earning call, 2024/Q2)

"Prime Video continues to produce compelling content with Fallout being our latest big hit on the heels of a very successful Roadhouse movie, with strong customer engagement in our original and partner content." --- (AMZN, earning call, 2024/Q1)

"And we see even higher engagement from younger users, aged 18 to 24, when they use search with AI overviews." --- (GOOG, earning call, 2024/Q2)

Forming Strategic Partnerships

Amazon's strategic partnerships, such as its investment in Calgary, exemplify how collaborations can drive shared growth and prosperity. Both Google and Netflix also emphasize strategic investments and acquisitions as part of their long-term growth strategies, highlighting the importance of partnerships in navigating new challenges.

"Amazon's investment sparks economic development and job creation, serving as a prime example of how strategic partnerships can lead to shared growth and prosperity in our community." – Jyoti Gondek, Mayor of Calgary About AmazonAmazon is guided by four principles: customer obsession rather than competitor focus, passion for invention, commitment to operational excellence, and long-term thinking." --- (AMZN, press release, 2024/05/24)

"And we are investing in the business for long term growth. We then evaluate both acquisitions and strategic investments." --- (GOOG, AGM, 2024/06/07)

"We anticipate that we may periodically raise additional debt capital. Our ability to obtain this or any additional financing that we may choose or need, including for the refinancing of upcoming maturities or potential strategic acquisitions and investments, will depend on, among other things, our development efforts, business plans, operating performance and the condition of the capital markets at the time we seek financing." --- (NFLX, sec filing, 2024/Q1)

"And then again, any cash beyond that, we'll return to shareholders. We've historically been mostly a build versus buy company with select strategic kind of acceleration through M&A." --- (NFLX, earning call, 2024/Q1)

Exploring Market Expansion

Disney's long-term investments and portfolio approach, along with Amazon's integration of shopping and streaming through Amazon Inspire, highlight diverse strategies for market expansion. Disney's focus on virtual production growth further underscores its commitment to innovative content creation as a key expansion tactic.

"Now all of those investments over time certainly will help. The other thing I think you have to look at is that we, in expanding that business over, you know, the last decade or so, we really have created a portfolio approach just to that business." --- (DIS, conference, 2024/05/15)

"Plus, millions of customers visited Amazon Inspire during Prime Day. Amazon Inspire is an in-Amazon app shopping experience that gives customers a way to discover products and seamlessly shop by exploring videos and images from other customers, influencers, and brands they love." --- (AMZN, press release, 2024/07/18)

"In the virtual production market, the production phase is expected to grow at the fastest CAGR." --- (DIS, press release, 2024/06/25)