Despite growing competition, Netflix managed to hold its crown as the leading streaming service in 2018, with 71% of the global market share and 68% of the US market share, according to Global Television Demand Report. The research firm looked at various data coming from social media, fan websites, video streaming sites, and other sources, using it to calculate global demand for content.
As an increasing number of people know how to watch American Netflix, shows like “The Office”, “The Haunting of Hill House”, or “Lost in Space” are now global scale must-watch titles.
Record spending on new content
With more than 150 million subscribers around the world, the streaming service giant had to spend a staggering $12 billion on content creation and licensing during 2018, with the latest projections showing that number could further increase towards $15 billion.
In comparison, Amazon spent only $5 billion, while Hulu spent $2.5 billion, but Netflix is due to face much fierce competition in 2019 when Disney will launch Disney Plus and Apple will begin to provide its Apple TV Plus service.
For 2019, the most popular shows coming on Netflix are Season 3 of “GLOW”, Season 3 of “Stranger Things”, and the final season of “Fuller House”.
Facing the loss of important shows
The record spending on content led to an increase in pricing for the most popular plan on Netflix, from $11 to $13 per month for HD streaming since the beginning of 2019. As revenue grew at 50% the speed of expenditure growth, the only option left was to raise prices, but that’s not the only problem for the near future.
During 2018, “The Office” had been one of the most popular shows on Netflix but faced with the 2020 NBC agreement expiration, the streaming giant is due to lose one of its greatest assets. The NBCUniversal package will be launched in 2020, and the nine-season of “The Office” will be streamed there in 2021.
Produced by Warner Bros. Studios and originally aired on NBC, “Friends” will be another major loss for Netflix at the start of 2020, when it will move to Warner Media’s new streaming service, HBO Max.
The importance of global growth
Although the company announced a loss of US subscribers on July 18th earnings release, it is the global demand for its services that will influence heavily the well-being of the company. The second quarter of 2019 had been below expectations, given that only 2.8 million international net additions were reported. The company expects international subscriptions to pick up towards 6.2 million in the third quarter of this year, with the new season of “Stranger Things” as the main engine for subscription growth.
With increasing spending’s on original content, the company will need to improve its focus on a country-by-country basis, given that price increases had been hurting the most subscribers in some geographical areas. Netflix needs to take its services to the next level and rely heavily on its own creations starting with 2020.
