Jan 16, 2019

Axios PM

By Mike Allen
Mike Allen

Situational awareness: Four Americans were killed and three wounded during an explosion in Manbij, Syria. Details.

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1 big thing: The campaign to dethrone Netflix

Illustration: Rebecca Zisser/Axios

Everyone wants a piece of the $19 billion U.S. subscription video market that Netflix created, then cornered, Axios' Sara Fischer reports.

The big picture: Netflix has already reached saturation in the U.S. with nearly 60 million domestic subscribers, and it can't afford to lose customers to new streaming rivals.

  • NBC plans to launch a streaming service next year.
  • AT&T (with WarnerMedia) and Disney (with 21st Century Fox) both plan to launch similar subscription video services this year.
  • Hulu now has more subscribers (25 million) than Comcast, the biggest cable company in the U.S.
  • And don't forget Amazon Prime, which has been the biggest Netflix competitor to date.

Between the lines: Many of the networks involved in rival services have begun pulling back on licensing their content to Netflix, promoting exclusivity to their own content instead.

  • This is why AT&T said last year that it will only license "Friends" to Netflix for a year before it launches its own service.

It's also why Netflix is pouring billions into creating more of its own original content series for TV:

  • The new hit "Tidying Up with Marie Kondo"
  • Hyper-localized content series like "Sacred Games" in India
  • Movies like the viral sensation "Bird Box"

Yes, but: Netflix may have an even bigger headache to deal with: free competition.

  • Digital streaming TV companies that don't charge people for access are rising as consumers face saturated budgets for subscription content.
  • Services with ad-supported channels or tiers, like Roku and Hulu, are booming.
  • And pay-TV companies like AT&T, Dish and now Comcast (which owns NBCUniversal) are giving subscribers access to new streaming video services for free.

What's next: The company reports earnings for Q4 tomorrow. Analysts seem bullish that Netflix will announce record subscriber growth.

Go deeper:

Bonus: This is why the shutdown won't end
Expand chart
Reproduced from Pew Research Center; Note: Survey of U.S. adults. In 2018, the survey question changed from do you favor "building a wall along the entire border with Mexico" to "substantially expanding the wall along the border with Mexico"; Chart: Axios Visuals

Go deeper, via Axios' David Nather

2. What you missed
  1. The polar vortex has broken down into 3 pieces — spilling cold air out of the Arctic like a leaky faucet and spawning intense winter storms in parts of the U.S. and Europe in particular. Go deeper.
  2. U.K. PM Theresa May has survived a motion of no-confidence brought by Labour leader Jeremy Corbyn by a vote of 325-306. Go deeper.
  3. 60% of wild coffee species worldwide are in danger of extinction due to deforestation, disease and climate change. Go deeper.
  4. House Speaker Nancy Pelosi suggested to President Trump today that he delay his State of the Union or deliver it in writing. Read the letter.
  5. Acting EPA administrator (and former coal lobbyist) Andrew Wheeler told senators during his confirmation hearing today that "the biggest issue with wildfires is forest management ... not drought." Go deeper.
  6. P.S. Roughly one-third of the $5 billion in cash GoFundMe has helped people raise since it started in 2010 has gone toward medical bills and expenses — the most of any category on the crowdfunding site.
3. 1 phone thing

Models with their bodies painted in gold show Motorola's Razr2 Luxury Edition in 2008. Photo: Jung Yeon-Je/AFP/Getty Images

"The Motorola Razr phone ... is being revived as a smartphone with a foldable screen and a starting price of roughly $1,500," WSJ reports.

  • "Lenovo, a Chinese computer maker that bought the Motorola Mobility handset business from Google in 2014, plans to manufacture about 200,000 of the new high-end phones."
Mike Allen