Amid complaints that video content is “breaking the Internet,” especially when it comes to bandwidth-challenged wireless carriers, and during a month that’s already seen multiple new entries to the video streaming game, it wouldn’t be a bad idea to take a step back and identify the companies that currently lead the streaming video industry. There are currently two flavors of streaming available: the all-you-can-watch variety that mimics the old cable subscription model (albeit at a lower price) and the rent-or-buy-on-demand model.
- Netflix (NASDAQ:NFLX) got its start renting DVDs by mail in 1998, then launched a video streaming service that proved immensely popular (studies indicated that Netflix video traffic accounted for more than 32% of peak U.S. download traffic at one point). 2011 was a costly year as the company floundered over a decision to split up its DVD rental and streaming businesses, raising prices for some longtime customers in the process. It has subsequently recovered from the 2011 bruising, with subscribers to its unlimited, $7.99-per-month video streaming plan climbing to 22 million. Besides offering TV and movie content from virtually every studio, Netflix has expanded into original content, producing its own shows and inking an exclusive distribution deal for highly anticipated new episodes of Arrested Development.
- Hulu started out as a free video streaming site, offering online viewers access to movies and TV shows with the catch that they would have to watch commercials. This was a TV industry-vetted venture from its start in 2007, and is now owned by NBCUniversal, News Corp.’s (NASDAQ:NWS) Fox Entertainment Group, and Disney (NYSE:DIS). In 2010, the company launched Hulu Plus, which expanded the service’s roster of TV shows and provided more episodes of shows it already carried, bringing totals to 28,000 TV episodes and 1,450 movies. Hulu Plus streaming video is priced at $7.99 per month, but access to content using mobile devices is limited.
- Google‘s (NASDAQ:GOOG) YouTube is one of the pioneers in streaming video. Launched in 2005 as an online video sharing site, it was acquired by Google for $1.65 billion in 2006 and reached an agreement with various studios to post movies and TV shows starting in 2008. In 2010, the site launched online film rentals with a catalog of 6,000 titles, prices ranging from 99 cents to $4.99, and a 48-hour viewing window. Among the studios participating in the venture are Disney, DreamWorks (NASDAQ:DWA), Universal, Warner Brothers, and Sony Pictures (NYSE:SNE).
- Apple‘s (NASDAQ:AAPL) iTunes Store started offering video content in 2005. The company now sells and rents TV shows and movies, playable on Apple computers, iOS devices, and AppleTVs. In 2011, Apple was the market leader in online movie and TV show sales, although its share has declined —from 74.4% of electronic sell-through revenues in 2009 to 64.5% in 2010, with a slight recovery, to 65.8%, in 2011.
- Amazon (NASDAQ:AMZN) is active in both on-demand online rentals and purchases and in unlimited streaming. Its Instant Video service offers over 100,000 TV shows and movies for rent online. In 2011, Amazon launched its Prime unlimited video-streaming program, offered for free to those who pony up the $79 yearly membership fee for its Prime discount shipping service. While it doesn’t have nearly the same catalog as its Instant Video, Amazon Prime does claim to offer more than 13,000 TV shows and movies. Best guesses put Prime membership at between 3 million and 5 million.
- Comcast (NASAQ:CMCSA), the largest U.S. cable provider (with 22.3 million video subscribers) announced Streampix, a $4.99 monthly service that gives customers access to previous-season TV shows and older movies on both TV and as a streaming service to Internet-connected devices. Content includes well-known shows from NBC Universal, Warner Bros, Sony Pictures, Disney-ABC Television Group, and others, but Streampix won’t be offered as a standalone service and so will require a Comcast subscription.
- Verizon (NYSE:VZ) is being challenged by competitors and consumer groups over its plans to buy wireless spectrum from cable companies, including Comcast, Time Warner Cable (NYSE:TWC), Bright House Networks. But VZ also is partnering with Coinstar (NASDAQ:CSTR) in a joint-venture video streaming service intended to take advantage of Coinstar’s Redbox video vending machine brand recognition. Coinstar’s 20 million customers rent an average of 1.9 million movies each day from 35,000 vending machines, while Verizon has 4.2 million Internet subscribers. Although the service hasn’t launched yet, Reuters puts the streaming package pricing at $6 monthly, including one DVD rental at a time from Redbox rental kiosks.
At the time of publication, Brad Moon did not own a position in any of the stocks named here.s