Netflix Sees Fortnite as a Bigger Rival Than HBO

Netflix Sees Fortnite as a Bigger Rival Than HBO

Fortnite boasts over 200 million registered users

  • 80 million log people in to play Fortnite each month
  • Netflix added 8.8 million new subscribers in last quarter
  • Epic Games earned $3 billion profit in 2018

In 2013, a top executive at Netflix famously announced that the company's ambition was to "become HBO faster than HBO can become us." The declaration made headlines at the time for its audacity: Netflix was gunning for the king of premium television. But now it seems Netflix has identified an even bigger rival: the massively popular video game Fortnite. The online shooter accounts for an enormous amount of consumers' screen time, Netflix said in a shareholder letter Thursday, making it a formidable foe in the global war for Internet users' attention.

"We earn consumer screen time, both mobile and television, away from a very broad set of competitors," Netflix said in the letter. "We compete with (and lose to) Fortnite more than HBO . . . There are thousands of competitors in this highly fragmented market vying to entertain consumers."

Netflix's decision to name-check Fortnite reflects the game's ever-growing popularity. It boasts over 200 million registered users, and some 80 million log in to play each month, according to publisher Epic Games. Thanks to an engaging combination of reward mechanics, social communication and ease of entry - the game's competitive mode is free to play - Fortnite soared to fresh heights last year, helping Epic earn a reported $3 billion in profit.

Epic wants to translate that success into an even bigger opportunity to hook internet users, by building its own app and game store that undercuts the likes of Apple and Google.

For now, Netflix's chief near-term threat remains other major TV content companies. As firms such as Disney pull their content off Netflix ahead of launching their own exclusive streaming video apps, Netflix will face pressure to defend its subscriber base - the only way the company makes money. In its earnings report Thursday, Netflix said it added modestly to its audience, drawing in 1.5 million users in the United States and 7.3 million internationally.

But Netflix's nod of respect to Fortnite is also a recognition of how significantly Netflix's horizons have expanded.

Ever since its humble days slinging DVDs to customers through the mail, Netflix has been a video company. Even now, as it pours billions into streaming content, Netflix restricts itself to displaying films and TV shows. But as it's evolved, Netflix has also come to appreciate that there are only so many hours in the day - meaning only so much screen time consumers have to devote to entertainment.

That puts it on a collision course with other digital media: Not just YouTube or Hulu, but podcasts, blogs and, yes, video games.

(c) 2019 The Washington Post


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