Netflix feels the pressure as competitors circle.

As the famed and admired early-mover in the high-quality streaming industry, Netflix has built a formidable business worth in the region of $125 billion. In the past three months, it added 6.7 million new subscribers, bringing its total userbase to 153 million worldwide.But the next three months will prove to be its most challenging yet.

Recently, Netflix wrote to investors to tell them that competition would be a good thing. The rising tide of streaming services would just tempt more people away from "linear TV", as they term it, and into...