When it comes to major U.S. industries, three tends to be the magic number.
Historically, auto manufacturing was long dominated by Chrysler, Ford and General Motors – the so-called “Big Three,” which at one point controlled over 60% of the U.S. auto market. A dominant trio shows up elsewhere, too, in everything from the U.S. defense market – think Lockheed Martin, Boeing and Northrup Grumman – to cellphone service providers (AT&T, T-Mobile and Verizon). The same goes for the U.S. airline industry in which American, Delta and United fly higher than the rest.
The rule of three also applies to what Americans watch; the glory days of television was dominated by three giants: ABC, CBS and NBC.
Now, in the digital age, we are rapidly moving to a “Big Three” dominating streaming services: Netflix, Amazon and Disney.
The latest step in that process is Netflix’s plan to acquire Warner Bros. for $72 billion. If approved, the move would solidify Netflix as the dominant streaming platform.
When streams converge
Starting life as a mail DVD subscription service, Netflix moved into streaming movies and TV shows in 2007, becoming a first-mover into the sphere.
Being an early adopter as viewing went from cable and legacy to online and streaming gave Netflix an advantages in also developing support technology and using subscriber data to create new content.
The subsequent impact was Netflix became a market leader, with quarterly profits now far exceeding its competitors, which often report losses.
Today, even without the Warner Bros. acquisition, Netflix has a dominant global base of over 300 million subscribers. Amazon Prime comes second with roughly 220 million subscribers, and Disney – which includes both Disney+ and Hulu – is third, with roughly 196 million subscribers. This means that between them, these three companies already control over 60% of the streaming market.
Netflix’s lead would only be reinforced by the proposed deal with Warner Bros., as it would add…