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Netflix subscribers to reach over 130 million by 2020

At least 130 million people will be signed up to Netflix as paying customers by 2020, according to research released today from analyst firm Ampere Analysis.

At least 130 million people will be signed up to Netflix as paying customers by 2020, according to research released today from analyst firm Ampere Analysis.

The figures point to at least six per cent of households globally being ‘Netflix-homes’ by the start of the next decade, with the nearest SVoD competitor, Amazon, boasting nearly 50 million video users.

Ampere’s research indicates that with “63 million paying subscribers at the end of Q2 2015, and with a presence in over 50 markets, and viewing times up 50 per cent in two years, Netflix is unequivocally the global market leader for subscription video-on-demand (SVOD).”

Other major findings from the report, include:

Netflix expects to invest nearly $5bn on acquired and original content in 2016, and Ampere anticipates this will grow by another $1bn in the subsequent two years

Simultaneously, Amazon is ramping up its own content plans: licensing existing titles and generating new ones, and example being the new motoring show fronted by the former Top Gear Collectively, Ampere expects Netflix and Amazon to be spending over $9bn per year on acquired and original content by 2020

Yet Ampere anticipates that Netflix’s investment in original programming will leave programme-makers a short window to maximise licensing agreements

If Netflix aims to hit the 50 per cent of spend devoted to originals hinted at in a recent investor call by 2020, its expenditure on acquired content could begin to fall as early as 2017

But this focus on exclusive home-grown content has plusses: consumers are increasingly happy to double-up on subscriptions. Across the UK, US, and Germany, approaching half of Amazon Prime’s video user-base subscribe to both Netflix and Amazon, evidence that it is content, not cost, that drives subscriptions priced at $10 or less per month

The tide turns against pay-TV

Pay-TV operators have enjoyed almost three decades of solid growth, yet now the tide has turned. Consumers are defecting, ‘cord-cutting’ from the traditional pay-TV companies in favour of digital video services. Ampere Analysis’s own figures show that as personal TV viewing time increases – whatever the channel or device – net additions of new subscribers to pay-TV services are in decline, while SVoD is growing. In 2015, over 41 million new customers took SVOD worldwide, the highest figure yet. By comparison, pay-TV net additions have been in decline since 2011, and will reach just over 23 million worldwide this year, the lowest figure for over ten years.

www.ampereanalysis.com

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