Why Is Nobody Taking On Netflix?
Netflix (NAS: NFLX) hitting a million subscribers in the U.K. and Ireland earlier this week is impressive.
This is the first market where the popular video service has run into real competition. It debuted its streaming platform last year in a market where BSkyB and Amazon.com's (NAS: AMZN) LOVEFiLM are entrenched players that have already locked up deals for exclusive content rights.
Now that crowded market is about to get even tighter.
Sainsbury just announced that it was teaming up with Rovi (NAS: ROVI) to roll out a digital video service.
For those not familiar with Sainsbury, it's a leading grocery store chain across the pond. Yes, Netflix is now competing with a supermarket in the U.K.!
To be fair, Sainsbury isn't just a "clean-up in aisle four" kind of operator. The foodstuffs retailer has already set up digital storefronts for MP3s and e-books.
However, it's simply remarkable that a grocery store operator, a satellite television juggernaut, and the world's leading online retailer are giving Netflix a run for its money overseas when there's no one really putting up much of a fight closer to home.
Yes, Amazon is giving it the old college try. Leaning on its millions of Amazon Prime shoppers who pay $79 a year for subsidized shipping to introduce streaming of a select catalog at no additional cost is a brilliant strategy. Unfortunately, a limited library and lack of the infrastructure that Netflix has established over the years that makes the process seamless across gaming consoles, set-top boxes, and optical disc players has held Amazon back.
In short, Netflix continues to grow since Amazon's streaming smorgasbord rolled out early last year. There were nearly 24 million domestic streaming subscribers on Netflix's rolls at the end of June.
Redbox parent Coinstar (NAS: CSTR) is teaming up with wireless carrier giant Verizon Wireless for a service that should roll out later this year, but Redbox has also been playing up its non-existent digital strategy for two years. Skeptics have a right to believe it only after they see it.
Cable and satellite TV providers have been rolling out streaming services, but they have limited participation to their own customers. Even Blockbuster -- in its head-scratching wisdom -- offers a premium streaming buffet that is only available to the thinning subscriber base of its parent DISH Network's (NAS: DISH) namesake satellite service.
Add it all up, and you see a streaming service in Netflix that is now larger than any individual cable or satellite platform in the country.
It wasn't always this way. Likely competitors simply let Netflix run away with the market, and now they're paying the price.
Come on, stateside Netflix alternatives. Even a British grocer is laughing at you.
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The article Why Is Nobody Taking On Netflix? originally appeared on Fool.com.The Motley Fool owns shares of Netflix and Amazon.com.Motley Fool newsletter serviceshave recommended buying shares of Coinstar, Amazon.com, and Netflix. The Motley Fool has adisclosure policy. We Fools may not all hold the same opinions, but we all believe thatconsidering a diverse range of insightsmakes us better investors. Try any of our Foolish newsletter servicesfree for 30 days.Longtime Fool contributor Rick Munarriz has been a Netflix subscriber and shareholder since 2002. He does not own shares in any of the other stocks in this story. Rick is also part of theRule Breakersnewsletter research team, seeking out tomorrow's ultimate growth stocks a day early.
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