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Netflix, Disney, and other media giants will battle over streaming in 2019

Media underwent a seismic shift in 2018, including a rise in streaming and multibillion-dollar mergers between AT&T (T) and Time Warner, Disney (DIS) & Fox (FOX), and Comcast (CMCSA) & Sky. As 2018 winds down, it’s off to the streaming races for 2019. Disney and AT&T will launch new streaming services, while Netflix (NFLX) will try to fend off the competition from new and old media giants.

Competitors will fine-tune their streaming strategies to rival Netflix

With over 137 million subscribers worldwide, Netflix dominates the streaming landscape but should expect some serious competition in 2019.

AT&T will launch a three-tiered streaming service in the fourth quarter of 2019 made up of a mix of movies and original programming.

Comcast, another key player in the streaming wars, also has plans to launch a streaming service.

“Some form of direct-to-consumer [DTC] we think will make sense for us. But all I’ll say now it’s not going to be a strategy that’s just let’s go copy what Netflix has done. Fabulous success, but that’s their model. We think our model will look like something that takes advantage of all that we’re good at. We’re intending to participate in a bunch of different ways. And our own DTC will just be one avenue in all that,” said Comcast’s Senior EVP & CFO Mike Cavanagh at the UBS conference.

For Netflix, streaming Disney-owned movies and TV shows was key to its growth. However, that relationship will change in 2019 when Disney pulls its content and places it on its own platform, Disney+, which it plans to launch in late 2019. Disney will be including the Fox entertainment content it acquired through its $71 billion deal with 21st Century Fox.

“Disney’s standalone streaming service is a potential game changer, especially with the FOX assets. So I think there’s a lot of questions in regards to how they’re going to roll that out, what the deployment looks, and how that impacts the industry,” said Daniel Ives, managing director and equity analyst at Wedbush.

According to 7Park data, Disney content viewership has accounted for 8% to 12% of U.S. streams on Netflix since the start of 2017. In addition to popular Disney movies and shows, Netflix will also lose popular Disney-owned Marvel series to Disney+. An estimated 1.7% of U.S. viewers streamed Marvel content on Netflix.

Expect more distribution relationships

Key to Netflix’s success has been streaming third-party content. According to 7Park data, in October 2018, original content accounted for 37% of U.S. viewership on the platform. While Netflix is working to increase its original content, the company still relies heavily on licensing deals with third parties.

The latest example of this is AT&T’s pursuit of a non-exclusive $100 million deal with Netflix for reruns of theFriends” TV show.

“Content licensing [has been] a great growth area and when you look at [it] on the streaming side, whether it’s Netflix, Hulu, YouTube TV or all of those … platforms. NBC, NBC Studios are the creators of some of the most popular shows that sit on those other platforms,” said Cavanagh.

While CBS has its own streaming services, CBS All Access and Showtime OTT, part of its business strategy in 2019 will be to continue to produce original content for other platforms. CBS’s chief creative officer David Nevins says it’s about exacting the full value of a show by giving it more exposure on other platforms.

“It’s important that we be a home […] for the creative community where they can sell elsewhere. We have shows on the Turner Network, we have shows on ABC, we have shows … on Netflix. If a show is right for one of our own platforms that’s probably where it’s going to end up. But there are some shows that are going to thrive better elsewhere and [we’re] happy to do it. Happy to build and create assets on other people’s platforms,” Nevins said.

New players in online streaming paid-TV services sector will compete for greater market share

According to Parks Associates, online streaming paid-TV services have grown significantly in the past two to three years. Two types companies offer online streaming TV services: There are traditional players such as AT&T, Dish Network, Comcast, and Charter, then there are a number of new companies which include YouTube TV, Philo, and Fubu.

“2019 is the make-or-break year for [online streaming paid TV services]. It’s either going to continue to grow, and if it continues to grow, it’s going to be a really dominant force in the industry. If it doesn’t, if it tapers off, then that means it’s simply the bargain-end of traditional pay TV. We’re really going to see in 2019 which of those is the case,” says Brett Sappington, senior director of research at Parks Associates.

If online streaming paid-TV services thrive, Sappington expects to see changes among the traditional players.

“If … online streaming paid-TV services … is a huge thing in 2019, what it’ll mean is that companies that have not been traditional players, like Google and Hulu and others, really will be upsetting the apple cart in terms of Comcast, Charter, and these other companies. And so what you would expect is Comcast, Charter, and the others would really have to respond in order to try and maintain their position and so the question really is would they respond by buying those companies? Do they respond by launching their own? They have some services right now that are similar to those services, but that’s really going to force them to change the way that they do business,” said Sappington.

Apple is 2019’s wild card

Apple’s foray into entertainment in 2018 has lagged behind key players like Amazon, Hulu, and Disney, according to Daniel Ives, managing director and equity analyst at Wedbush.

Apple signed a multi-year deal with Oscar-winning independent entertainment company A24 for the studio to produce original movies. Ives believes that 2019 will be the year when consumers will see more content spending by technology players.

“I would view the biggest wild card from a content perspective not being Netflix, Disney, Amazon. I view the biggest wild card is probably Apple … Them acquiring A24 is something that we view as a very real possibility. Apple they’ve been behind the game on content, and it’s clear just based on further monetization … that that’s something that they need to bet further on,” he said.

Sibile Marcellus is an on-air reporter covering the day’s top stories in business for Yahoo Finance’s three daily live shows. Follow her on Twitter @sibileTV.

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