![]() Maybe change the story and focus investors on revenue gains from selling advertising space?Īlternatively, you could write the story yourself. If Netflix's share price links to its ability to drive subscriber growth, we have a big problem. Investors appear laser focused on subscriber growth, and so long as Netflix delivers on that metric, investors will bid its shares up. Now let's take into account this quote from Wedbush Securities analyst, Michael Pachter. ![]() Keep in mind that the United States is a relatively mature market compared to the opportunities in Asia-Pacific, especially India. However, this market is getting saturated very quickly, and subscriber growth will ultimately stagnate as SVOD services compete with one another for user share. Households are adopting SVOD en-masse, creating an expected revenue pool in the tens of billions by 2020. Netflix users consume more hours of video content than YouTube users per day. Aside from revenue and subscriber growth, we can see it through user action. SVOD is becoming the preferred means to consume video content. However, it makes for a pretty compelling story. ![]() Within this group, a little over 60% of people subscribe to two or more services. Now, I'm going to throw one more statistic your way.Īround 70% of households in the United States subscribe to at least one SVOD service. Moreover, with saturation, the market starts to slow down a tad.īusiness Insider predicts United States subscription growth to fall from 30% in 2014 to a measly 4% by 2018. Let's also remember the YouTube Red is part of the SVOD realm, launching in 2014 with upwards of 1.5 million users. Interestingly, some of these new players came from traditional television roots - I'm looking at you DirecTV Now (owned by AT&T). However, markets are starting to get a little saturated.ĭuring 2016, there were around 27 SVOD platforms launched in the United States. It seems, for now, there are strong indicators that Netflix is on track to grab a large piece of the expected $51 billion SVOD revenue pie in 2020. Incredible what can happen in the space of a quarter, right? It's a very different story to the previous quarter, below forecast with a growth rate of 0.3% for the domestic market (United States).Īt the time, publishers including Bloomberg labelled it the beginning of the end for Netflix. The financial results from Q3 beat analysts' expectations with over 3.2 million people joining the SVOD bandwagon around the world. ![]() I will caveat, though, that the average video length on YouTube is considerably less than that of Netflix while YouTube's user base exceeds 1.3 billion. The number of global Netflix subscribers exploded in 2016, with over 86 million across more than 190 countries, consuming more than 125 million hours of content a day.įor comparison, YouTube users average 3.25 billion hours of video viewing a month or around 106 million hours of content viewed a day. While Frank made this remark about politics on the Netflix Original Series, House of Cards, it's the subscription-video-on-demand (SVOD) service that appears to be living it. There is but one rule: hunt or be hunted." - Frank Underwood "For those of us climbing to the top of the food chain, there can be no mercy.
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