Lockdown may have ended but Netflix remains on top
Netflix subscriber growth may be slowing in the UK but there are two key reasons why consumers are staying loyal to the streaming platform, writes the UK Market Lead at Appinio
When the pandemic brought the world to a halt, and, like everyone else, I was forced to stay at home, there were only so many banana breads I could bake before I found myself perched in front of the TV watching yet another series on Netflix.
It seems that the rest of the world were doing the same thing as the streaming giant experienced rapid subscriber growth of 37 million new users in 2020 alone.
However, despite this growth, there are signs that Netflix’s position as the top streaming service is coming to an end. Growth in users, as shown during the streaming giant’s Q2 results, has slowed down and competitors like Disney+ and Amazon Prime Video have tightened the gap in subscriber numbers over the past several years.
Netflix’s competitors
In reaction to Netflix’s Q2 results, we at Appinio wanted to delve a little deeper into this subject so we conducted a nationally representative survey to gauge public sentiment towards Netflix. We found that, despite only recording 1.5 million new subscribers in Q2 (250,000 fewer than Netflix was anticipating), 81% of Brits say they use the streaming platform, which displays the significant cut-through it holds in the UK market.
Despite their dominance, Netflix doesn’t have an exclusive hold over people’s streaming platforms. Out of those who use Netflix as a streaming service, 66% say they also use Amazon Prime, 42% also use Disney+ and 27% also use Sky Q, which shows that it’s pretty standard for people to subscribe to multiple platforms at one time.
The significant growth and overall success of the likes of Disney+ and Amazon Prime in achieving cut-through in the UK market is exemplified by the fact that just 19% of Netflix users use no other streaming provider.
Viewership and emotion
Netflix is the original streaming giant, so it’s not surprising to see that so many people have subscribed. For many of us there’s a nostalgic association – it’s the very first streaming provider that offered us a seemingly infinite range of films at just one touch of a button. It feels hard to imagine now, but before Netflix our choices were limited to online streaming sites that buffered for years, a primitive YouTube platform and our dusty CD shelves.
But how do people feel about it now? Appinio data found that overall, Brits are very happy with Netflix as 92% say they are either satisfied or very satisfied with the platform compared to just 83% with Amazon Prime. Furthermore, Netflix’s large investments in their content production seems to be paying off as 43% of Brits say that Netflix’s content offering has improved over the last 12 months.
The streaming giant has also become a staple of household viewing, especially among young people, as Appinio data found that 95% of 16- to 24-year-olds use the platform, as well as one in three 55- to 65-year-olds and just over half of 70- to 99-year-olds.
The fact that Netflix has such a considerable cut through with older demographics is impressive, as typically new tech can be harder to integrate with older members of society.
In addition, nearly 50% of Brits use Netflix multiple times a week, with young people being the biggest binge-watchers, as half of 18- to 24-year-olds use the platform every day of the week. The huge popularity among young people could be a major reason why Netflix subscriber growth has slowed over the last quarter, as nearly all young people are already using the platform.
Gaming and young demographics
As a result, Netflix might have to look towards making connections in the wider entertainment market; their announcement of the introduction of mobile games is a step in this direction. This gives Netflix greater scope to compete with the likes of YouTube who have also embraced the gaming and esports scene.
By moving beyond their current core product, they can tap into new markets and build their global subscriber base. Including games in the standard subscription will also allow them to gauge popularity before any potential price increases.
On the topic of price elasticity, Appinio data found that 15% are contemplating cancelling their Netflix subscription within the next six months, so it’s a smart move from Netflix to hold off on increasing the price at the moment. The pandemic has highlighted the disruptive and unpredictable nature of consumer habits so it’s even more important for streaming services to be constantly innovating their business model, one step ahead in their thinking and they can’t afford to rely on its OG status, or else it risks losing viewers to its competitors.
While competitors continue to seek to take Netflix’s crown, the streaming giant remains at the top of the streaming wars for now. Its subscriber base is still growing, they’re expanding their offering and Brits are happy with their content. Yes lockdown may have ended, but people’s thirst for Netflix lives on.