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Netflix says Fortnite is bigger competition than HBO or Hulu

signal

signal

Member
Oct 28, 2017
40,199
CNBC
Polygon

With Netflix's revenue hitting $16 billion in 2018, HBO's parent company WarnerMedia and Disney preparing to launch their own streaming services, and every other media company under the sun splintering access into a million different pieces, 2019 looks to be the most brutal year of "the streaming wars" yet. But as far as Netflix is concerned, the competition extends beyond duking it out with the titans of Old Hollywood: This is a fight for eyeballs, and one of the fiercest competitors is, of all things in the streaming giant's orbit, Epic Games.
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In its earnings report for the 2018, published Thursday, Netflix estimated that it commands 10 percent of television screen time in the U.S., and slightly less than that for total mobile screen time. In other countries, the percentages are lower due to "lower penetration of our service." The reason, Netflix said, isn't because of obvious streaming competition, but of online platforms and video games.

"We compete with (and lose to) Fortnite more than HBO," the report indicated.
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By the end of 2018, Netflix claimed nearly 139 million paying memberships worldwide. Meanwhile, in November 2018, Epic reported that its blockbuster battle royale game commanded upwards of 200 million registered users. In its quarterly report, Netflix made clear that "consumer screen time" is its most valuable metric, and that Fortnite — just one of endless options for plugged-in audiences — offers the stiffest competition.
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Nothing that shocking. There are only so many hours in a day and if video games are more mainstream then it makes sense streaming services would suffer. Interesting they are pointing to a different medium entirely though rather than saying something like Twitch, even if the amount of people watching isn't near the amount playing.
 
BrickArts295

BrickArts295

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Oct 26, 2017
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For a second, I read Netflix -- Fortnite and my mind went to "A netflix movie already?"
Anyways, time for a Fortnite Story Mode.
 
Plasmid

Plasmid

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How long until we get A NETFLIX ORIGINAL: VICTORY ROYALE?
 
Wandu

Wandu

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Oct 27, 2017
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Boggles my mind. How this is a thing? Netflix is worried about a free to play video game taking sub revenue.
 
Saifu

Saifu

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Oct 27, 2017
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They are not wrong.
People are like: Should I watch Netflix or play hours of Fortnite instead?
 
Raijinto

Raijinto

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Yeah this makes sense, and also works the opposite way when we discuss competition and whatnot here. It's a big world and there's many different things to spend money on for entertainment, yet far too often we only see games and game companies in competition with each other.
 
TheBaldwin

TheBaldwin

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Feb 25, 2018
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Wandu said:
Boggles my mind. How this is a thing? Netflix is worried about a free to play video game taking sub revenue.
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Makes Sense.

With how accessible everything is, time is the most valuable.

And fortnite sure is sucking up alot of time, for free. So people arnt gonna use netflix as much and probably see it as not being worth it.
 
Andri

Andri

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Mar 20, 2018
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Wandu said:
Boggles my mind. How this is a thing? Netflix is worried about a free to play video game taking sub revenue.
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Nah, Netflix is worried said ftp video game will take up so much of peoples free time they dont watch netflix anymore, and are thus gonna unsub from something they no longer need.

If people spend their evenings with fortnite and chatting with their friends in fortnite, thats evenings no spent watching netflix content and talking with friends about netflix shows.
 
Lelouch0612

Lelouch0612

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Oct 25, 2017
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That reminded me of what Reggie was saying about Nintendo competing for entertainment time.

It is the same logic.
 
Veidt

Veidt

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Oct 27, 2017
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Wandu said:
Boggles my mind. How this is a thing? Netflix is worried about a free to play video game taking sub revenue.
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Netflix isn't worried about a F2P game taking sub revenue. They're worried about other sources of entertainment - in this case online games - competing for their audience's time.
 
tyfon

tyfon

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Nov 2, 2017
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Netflix is actually not that far from gaming itself.
I caught my daughter playing mine craft story mode in netflix on my ps4 (with the ds4).
First I thought she had somehow figured out how to buy games with my credit card but then I realised it was just a "movie" where you selected paths to take. It was still pretty cool to see.
 

Deleted member 43077

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its about trying to get the consumers time, there are a lot of things to watch and play these days and a lot of it is great content.
 

brainchild

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Nov 25, 2017
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They're absolutely right and it'll be interesting to see how they plan to address this.
 
Wandu

Wandu

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Oct 27, 2017
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I would expect Fortnite to take up mostly kids and adolescents as far as time goes. Adults, however, I would expect to have more time with other sub services as far as media. Yes, I do know adults play Fortnite as well.

brainchild said:
They're absolutely right and it'll be interesting to see how they plan to address this.
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They are addressing this but raising prices unfortunately. The supposed incentive is to have more original content by increasing prices.
 

Deleted member 249

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This is because Fortnite is on Nintendo Switch, while Netflix is not. The math is simple, and obvious.
 
OP
OP
signal

signal

Member
Oct 28, 2017
40,199
brainchild said:
They're absolutely right and it'll be interesting to see how they plan to address this.
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Picture in picture mode that lets you watch Fortnite on Twitch while watching Netflix. Alternatively, start selling this setup to subscribers

Ec7JuZw.jpg
 
Wowfunhappy

Wowfunhappy

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Oct 27, 2017
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...I feel like companies say crap like this because it makes them appear more forward thinking. "Hey, look at us, we're such a category leader we don't even CARE about other streaming platforms. We're competing with Fortnite! And Facebook! And Going Outside™."

It's kind of like how Nintendo and Sony both say they aren't primarily competing with each other. Give me a break. Sony didn't release All-Stars Battle Royale so they could compete with restaurants.

Like, yeah, sure, anything that cuts down on leisure time can be seen as a Netflix competitor. But I've got to think that Disney opening their own streaming platform is a more direct threat than a completely alternate forms of entertainment.
 
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oni-link

oni-link

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Ninja will get his own Netflix special of him streaming on a random
Tuesday evening
 
Eoin

Eoin

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Wowfunhappy said:
...I feel like companies sometimes say crap like this because it makes them seem more forward thinking. "Look at us, we're such a category leader we don't even care about other streaming platforms. We're competing with Fortnite! And Facebook! And Going Outside™."
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They're right though. The less people use Netflix, the more they are likely to consider the subscription as being a waste of their money, so everything that absorbs time is a competitor for them. Netflix are also in a position where their service is an icon on other company's platforms, and lots of those platforms are games machines. Every time someone turns on a PS4, Netflix is competing with dozens or hundreds of other things they can choose to do instead of opening Netflix.

Wowfunhappy said:
Like, yeah, sure, anything that cuts down on leisure time can be seen as a Netflix competitor. But I've got to think that Disney opening their own streaming platform is a more direct threat than completely alternate forms of entertainment.
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Disney's service is a threat in the future, so not immediately relevant to Netflix's current performance, which is what this earnings report was addressing.
 
Alaxend0l

Alaxend0l

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Dec 6, 2017
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Reminds me of something one of my professors told me. When making a piece of entertainment, like a video game, you're not just competing against other video games, you're competing against anything else that the player could be doing at that moment. So yeah, I see the logic in this.
 
Wowfunhappy

Wowfunhappy

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Oct 27, 2017
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brainchild said:
It's a fundamental economic truth
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But is it relevant? I recognize that it's true, but I disagree that entertainment industry leaders should be thinking about it.

Yes, people have limited amounts of time, and everything has an opportunity cost. However, this does not mean that AMC (the movie theatre chain) should focus their strategy and marketing on beating Starbucks, because while it's true that no one can be at Starbucks and AMC simultaneously, people usually want to either go out for coffee or go out to watch a movie. Or maybe they'll do one after the other, because a diversity of activities is generally satisfying.

AMC should focus their their marketing and strategy on beating Cinemark, because anyone who wants to watch the new Avengers movie will need to go to a theatre, and AMC wants that ticket.

Edit: Now, if Netflix is saying they want to go into game production, because they think TV is a dying industry or some such... okay. Netflix did release that Choose-Your-Own-Adventure thing recently, I guess. But, Netflix will be mostly starting from scratch, without any of the core competencies in technology or content creation that established players in the video game industry already possess. I think Netflix would be better off focusing on TV and video streaming.
 
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RestEerie

RestEerie

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Aug 20, 2018
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Fortnite Tactics
Fortnite Arena (MOBA)
Fortnite Adventures - A Telltale Adventure series
Fortnite Decks: A Fornite Card Game
Fortnite Days: Starring Jazz JackRabbit

You are welcome, Epic
 

brainchild

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Wowfunhappy said:
But is it relevant? I recognize that it's true, but I disagree that entertainment industry leaders should be thinking about it.

Yes, people have limited amounts of time, and everything has an opportunity cost. However, this does not mean that AMC should focus their strategy and marketing on beating Starbucks, because while it's true that no one can be at Starbucks and AMC simultaneously, people usually want to either go out for coffee or go out to watch a movie. Or maybe they'll do one after the other, because a diversity of activities is generally satisfying.

AMC should focus their their marketing and strategy on beating Cinemark, because anyone who wants to watch the new Avengers movie will need to go to a theatre, and AMC wants that ticket.
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That's a very myopic way to think about business strategies. Based on your logic, Nintendo would have never become a video game company. The companies that view competitive markets macroscopically are the companies that survive for centuries, like Nintendo.

Having a broad awareness of encroaching markets and knowing how to put your business in a position to evolve is what keeps a company relevant in the long run. So yes, what Netflix is thinking about is relevant, and it's what's going to keep them around for a really long time.
 
Wowfunhappy

Wowfunhappy

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brainchild said:
That's a very myopic way to think about business strategies. Based on your logic, Nintendo would have never become a video game company. The companies that view competitive markets macroscopically are the companies that survive for centuries, like Nintendo.

Having a broad awareness of encroaching markets and knowing how to put your business in a position to evolve is what keeps a company to relevant in the long run. So yes, what Netflix is thinking about is relevant, and it's what's going to keep them around for a really long time.
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Nintendo was a pretty small company in a business with few barriers to entry, so the pivot made sense. Just as Netflix's previous pivot away from DVDs-by-mail made sense, since that was clearly a dying industry. But while it's certainly true that big, established companies sometimes enter new industries, they don't usually pivot to entirely different industries unless the current one is clearly dying.

I didn't mean that Netflix should be ignoring Fortnite completely, but I do think they should be paying more attention to HBO. If HBO slashes their subscription price in half, or releases a slate of huge hit shows a la GoT, that's going to have a much more direct impact on Netflix's business than anything Fortnite related. That's the definition of a competitor.
 
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