Subscription Commerce

Who Could Be The Next Netflix?

video streaming laptop

Subscription commerce is more than just meal kits and monthly razor shipments. Increasingly, tech companies are also jumping into the fray. Digital entertainment has become a cornerstone of subscription commerce — perhaps even more so than goods and products.

Facebook has been testing a subscription model for its Facebook Watch hub, which features Discovery Communications’ MotorTrend on Demand, CollegeHumor’s Dropout, among others. Potentially HBO, Showtime and Starz will also host content on Watch.

Meanwhile, Google is also getting in on the subscription economy with Play Pass, a new subscription gaming service for Android phones, while Ubisoft also launched a subscription gaming service Uplay+ this month.

The latest Subscription Commerce Tracker tracks these new developments in the increasingly competitive subscription streaming services market and looks at new entrants that could topple dominant player Netflix.

The State of Streaming

By 2022, the global video streaming industry is on track to be worth $30.6 billion.

According to the Motion Picture Association of America (MPAA), last year the number of video streaming subscribers worldwide surpassed the number of cable subscribers. In exact numbers, that’s 613 million vs. 556 million.

Streaming isn’t just replacing cable, the revenue generated by streaming services is poised to eclipse theatrical revenue worldwide this year.

According to the latest Subscription Commerce Conversion Index, streaming is by far the most common subscription service with 70 percent of subscribers using it. Overall, subscription businesses have a churn rate of 5.6 percent. This is mostly due to voluntary churn (cancellations, in other words) with a rate of 4.2 percent compared to involuntary churn (1.4 percent) which is usually the result of payment issues.

That research also shows a widening gap between leading subscription providers and the rest of the pack. According to the Index, middle performers, which make up 76 percent of the sample, saw their index scores decline, from 63.5 in Q1 2019 to 63.2 in in Q2, continuing a downward trend since 2017. Meanwhile, the top 20 providers improved their scores, earning 82.8 in Q2 2019, up from 80.3 in Q1.

Netflix is currently the subscription market’s undisputed leader, with 158.8 million viewers in 2019, but based on recent developments it’s not certain they will remain on top. Netflix has been losing share of the U.S. over the top (OTT) market. In 2014, Netflix had 90 percent of the market, while this year it’s projected to dip to 87 percent.

Meanwhile, Hulu is gaining and estimated to account for 41.5 percent of subscription OTT video service users this year. Amazon Prime Video will remain the second-largest subscription OTT provider by viewers in the U.S. with 52.9 percent market penetration.

A true Netflix killer hasn’t emerged yet, but a number of worthy contenders — along with established players HBO Now, Amazon Prime and Hulu — could disrupt the streaming market.


The launch of Disney+ is scheduled for early November, pushing the entertainment giant to end its licensing contract with Netflix in February. All Disney content will leave Netflix for Disney+ in the coming months. Disney reportedly lost $150 million when it canceled its Netflix contract. However, Disney’s content will likely remain on Hulu, as the former owns a 60 percent stake in the latter. The new Disney+ streaming service will cost $6.99 per month.


Apple will launch its Apple TV+ video subscription service this fall. It has reportedly committed $5 billion to producing original video content. The Apple TV+ subscription price is currently unknown, though it’s been reported that it could be approximately $10 a month after a free trial. This would make it more expensive than its competitors, with Netflix’s plans starting at $9 a month and Hulu’s starting at $6.

Other Contenders

Netflix is also being challenged by the loss of popular shows like “Friends” and “The Office.” The company is expected to lose Friends to WarnerMedia’s upcoming streaming service HBO Max that’s set to launch in 2020. HBO Max might not be competing on price, though, since it’s rumored the service will cost between $16 and $17 a month.

Netflix recently announced that it will lose the streaming rights to NBC’s “The Office” in 2021. The popular show is scheduled to join NBCUniversal’s upcoming streaming service. This is a bigger blow than it might seem on the surface, considering the show accounted for more than 52 billion minutes of stream time in 2018, approximately 3 percent of all U.S. Netflix traffic.



The How We Shop Report, a PYMNTS collaboration with PayPal, aims to understand how consumers of all ages and incomes are shifting to shopping and paying online in the midst of the COVID-19 pandemic. Our research builds on a series of studies conducted since March, surveying more than 16,000 consumers on how their shopping habits and payments preferences are changing as the crisis continues. This report focuses on our latest survey of 2,163 respondents and examines how their increased appetite for online commerce and digital touchless methods, such as QR codes, contactless cards and digital wallets, is poised to shape the post-pandemic economy.