Netflix: Looking towards 2025
Netflix had an excellent first quarter in 2020 with the tail end encompassing lockdown and likely eliminating churn, as usage exploded
Looking forward, there are lessons to be learnt from Netflix's performance in the US market, which is maturing and stabilising: we model strategy around pricing, content spend and subscription-tier mix
However, differences in other markets remain stark—such as the varying propensities to absorb price rises, and the attachment to locally-produced content
Related reports
Netflix: churn, content release and marketing
13 December 2019Netflix’s US business provides an insight into the patterns of the subscriber take-up of a maturing streaming service, trends that the comparatively nascent international markets may yet have ahead
Through analysis of the relationship between Netflix’s churn, subscriber additions, marketing spend and content release schedule, a clearer view of the rhythms of the streaming business become apparent
Rising churn, and correlation—such as the emphasis on returning original series during the year’s turbulent second quarter—gives guidance on Netflix’s likely future course, including its use of debt
The UK lockdown since mid-March has boosted TV time to levels not seen since 2014, with broadcast TV and online video each growing by nearly 40 minutes/person/day.
While trends vary significantly by demographic, news consumption has been a common catalyst for linear TV’s growth, benefitting the BBC above all. Although Sky News has also flourished, Sky’s portfolio has been seriously impacted by the lack of live sport.
2019 extended many of the long-running trends of the last decade, but, notably, online video’s growth rate appeared to slow among youngsters, in contrast to older demographics. 35-54-year-olds watching more VOD will have significant implications for linear broadcasters down the line.
COVID-19 has led to an unprecedented decline in advertiser demand for TV, and while the steepest drop has occurred, broadcasters will feel the impact over a long period of time.
Programming costs are being cut or deferred, but it is not possible—or even sensible—to reduce total programming budgets significantly in the mid-term due to existing contractual commitments.
Increased government support in the form of advertising spend, a loosening of Channel 4's programming obligations—the lifeblood of the independent production sector—and revisions to existing measures (to capture a greater proportion of freelancers) will be required to ensure a flourishing, vibrant sector for the future.
Netflix: churn, content release and marketing
13 December 2019Netflix’s US business provides an insight into the patterns of the subscriber take-up of a maturing streaming service, trends that the comparatively nascent international markets may yet have ahead
Through analysis of the relationship between Netflix’s churn, subscriber additions, marketing spend and content release schedule, a clearer view of the rhythms of the streaming business become apparent
Rising churn, and correlation—such as the emphasis on returning original series during the year’s turbulent second quarter—gives guidance on Netflix’s likely future course, including its use of debt
The UK lockdown since mid-March has boosted TV time to levels not seen since 2014, with broadcast TV and online video each growing by nearly 40 minutes/person/day.
While trends vary significantly by demographic, news consumption has been a common catalyst for linear TV’s growth, benefitting the BBC above all. Although Sky News has also flourished, Sky’s portfolio has been seriously impacted by the lack of live sport.
2019 extended many of the long-running trends of the last decade, but, notably, online video’s growth rate appeared to slow among youngsters, in contrast to older demographics. 35-54-year-olds watching more VOD will have significant implications for linear broadcasters down the line.
COVID-19 has led to an unprecedented decline in advertiser demand for TV, and while the steepest drop has occurred, broadcasters will feel the impact over a long period of time.
Programming costs are being cut or deferred, but it is not possible—or even sensible—to reduce total programming budgets significantly in the mid-term due to existing contractual commitments.
Increased government support in the form of advertising spend, a loosening of Channel 4's programming obligations—the lifeblood of the independent production sector—and revisions to existing measures (to capture a greater proportion of freelancers) will be required to ensure a flourishing, vibrant sector for the future.