Who will win the streaming wars?

What has happened?

Apple has become the latest business to invest heavily in the future of streaming. It is launching a new video subscription service, to be known as Apple TV+, with big names, including Oprah Winfrey and Steven Spielberg, signed up to make programmes. Streaming services, which deliver content on-demand to televisions and computers over the internet for a monthly fee, are fast replacing traditional television on both sides of the Atlantic. The number of "cord cutters" those giving up pay-TV cable packages for cheaper online streaming options doubled in the US last year. In the UK, more 12- to 15-year-olds have heard of YouTube and Netflix than know about BBC One.

Which company is leading the way?

Netflix is not the only streaming service, but it is the clear market leader. It accounts for 15% of all global internet traffic and boasts nearly 140 million subscribers worldwide. In Britain it had an estimated 9.78 million subscribers at the end of 2018. Netflix allows people to binge-watch their favourite programmes, prompting chief executive Reed Hastings to once joke that "we actually compete with sleep. And we're winning."

How did it do it?

Netflix's stellar growth the stock has surged 6,500% over the last decade has been driven by heavy investment in original shows such as The Crown and Orange Is The New Black. The "fire hose" of new content (Netflix had roughly 700 original projects in its back catalogue at the end of last year) doesn't come cheap: this year's programmes will cost it $15bn. However, with consultancy Future Market Insights forecasting that the global streaming market will be worth more than $591bn within a decade, up from $139bn last year, investors are more than happy to back a company carving out a dominant position.

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Who are its rivals?

Two recent American mega-mergers have created powerful new players with streaming ambitions of their own. Walt Disney's $71.3bn takeover of 21st Century Fox has added the likes of X-Men and The Simpsons to an already bulging back catalogue that includes Star Wars. And US cable giant AT&T's $85.4bn acquisition of Time Warner last year created a media behemoth that holds the rights to programmes such as Game of Thrones and The Big Bang Theory. Many of the programmes owned by these media conglomerates are licensed out to Netflix and other streaming services. But Disney and AT&T intend to launch their own streaming services and will be tempted to pull content from competitors to lure across new customers. Netflix has paid AT&T's WarnerMedia a staggering $100m for the right to continue streaming Friends until the end of this year. That could be a taste of things to come.

What about the tech giants?

Silicon Valley's giants are also joining the "streaming wars". Amazon's Prime Video service spent $6bn on new content last year, while Facebook Watch and Google's YouTube Premium are also commissioning their own "originals" in the hope of finding a hit. In the UK, ITV and the BBC announced in February they will be collaborating on a new venture, BritBox. However, the British operation lacks the deep pockets of the FAANG (Facebook, Apple, Amazon, Netflix and Google) operators in a market dominated by new and exclusive content.

Is this bad news for Netflix?

A big concern for Netflix is that the likes of Apple and Amazon may use their streaming services as a loss-leader, tempting consumers into their technology ecosystems with lavishly made TV shows at bargain-basement subscription prices. That could ultimately make the streaming business unprofitable. Nevertheless, Netflix also has some clear advantages. It is the first-mover in this market and demonstrated its pricing power in January when it raised subscription prices in the US without losing customers. For all that its rivals are commissioning programmes, none are close to emulating the market leader's rate of production: last year Amazon had 76 original shows in production, far short of Netflix's 293.

Is this good news for the consumer?

A price war and a dash for new content is likely to keep subscribers entertained at the expense of loss-making tech operators for some time. Today's media consumers can enjoy access to vast libraries of classic and original shows for a lower monthly subscription than they would have paid for a single DVD a decade ago. A monthly Netflix subscription typically costs £7.99, with new offerings such as BritBox likely to undercut that. However, says Peter Bradshaw in The Guardian, there could be less risk-taking and innovation in future if mega-mergers ultimately see everything "mushed together into a great big monopolistic blob" overseen by unimaginative "ass-covering executives".

Who else could be likely winners?

A rush for new content could be a boon for production companies such as Peppa Pig maker Entertainment One (LSE: ETO)or even ITV (LSE: ITV). The Motley Fool's Adam Levy notes that in a gold rush investors should look towards the "shovel maker, not the gold diggers", flagging streaming kit maker Roku (Nasdaq: ROKU) as a likely beneficiary of the on-demand boom. Nicholas Jasinski in Barron's says that the cable providers could actually emerge as winners from a changed media market. While the likes of Sky-owner Comcast (Nasdaq: CMCSA) would appear likely to lose out from cable cutting, "their ability to offer broadband to customers using existing infrastructure" is vital in an era when households need speedy connections to stream television shows. A UK equivalent would be BT (LSE: BT.A).