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Home / Business / A survey shows why Netflix does not have to worry about the competition – The Motley Fool

A survey shows why Netflix does not have to worry about the competition – The Motley Fool



If you're like most Americans, you're a subscriber to a streaming service.

A recent Digital Media Trends survey conducted by Deloitte revealed that 55% of American households subscribed to one or more streaming services. This is the first time that more than half of Americans stream customers. In 2009 this figure was only 10%.

This was not the only good news for Netflix Inc. (NASDAQ: NFLX) and its ilk. According to the results of the survey, there should be a long road to growth for streaming services as more Americans realize that they offer a much better value than traditional pay-TV options. Customers usually pay more than one service. Let's take a look at some of the most important lessons from research.

  The interior of a laptop displays a number of different streaming options.

Source: Getty Images.

. 1 Customers pay for multiple services

The streaming field is becoming increasingly crowded. In addition to established long-standing operators such as Netflix, Amazon (NASDAQ: AMZN) and Hulu, Apple (NASDAQ: AAPL) and Disney (NYSE : DIS) are both looking for a piece of the pie, and premium channels like HBO and Showtime also operate their own standalone streaming services.

However, streaming is not a zero-sum game. In most cases, customers subscribe to multiple services, which means that the different subscription packages are more complementary than competitors. In fact, Deloitte found out that Americans subscribe to three streaming services on average and spend a total of $ 2.1 billion a month on such entertainment, and that figure is growing every month.

Deloitte also said, "Consumer appetite for video and streaming is insatiable," as the time spent consuming videos has also increased. With Apple and Disney launching their own streaming services, it seems that the number of subscribers to services will only increase by three as the content improves.

. 2 Originals are king

Since Netflix broke the balancing act with House of Cards streaming services are increasingly focusing on their own programming. Hulu and Amazon have both achieved success: Hulu won an Emmy for The Handmaids Tale and Amazon has won prizes for a variety of shows, including Transparent The Deloitte survey found that Americans have a strong desire for original content, with half of the subscribers appreciating the quality of the original content and 54% saying they had signed up for a service to play original programming. The availability of original content should continue to attract new customers to streaming platforms, as well as the availability of other popular features, such as: For example, the ability to see content when and where they want and without looking for ads.

This result explains why Netflix is ​​investing billions in original content and plans to release 700 original series of TV series and 80 original films in 2018. This strategy explains why users subscribe to multiple services because originals provide unique value to the services they host. [19659014]. 3 Pay-TV fades

The so-called "cord-cutting" phenomenon, the process by which Americans give up their streaming services, has been going on for years, but Deloitte seemed to notice that cable cutting was accelerating , The research firm said the "value gap" between streaming and pay-TV is expanding, which means that streaming for Americans will be even better than before, compared to cable.

Deloitte said that there is a growing gap between TV subscribers and what they are actually getting, and the survey found that nearly half of those subscribers are dissatisfied with their service. Seventy percent said that they feel that they are not getting enough value for their money.

The poll also said that pay-TV penetration dropped from 75% to 63% and that 27% of respondents said they cut the cable last year

What that means for streaming services like Netflix is that more customers will sign up in the coming years as cable dissatisfaction grows and streaming options improve. This increase in customer base is a boon to all streaming competitors, as it should only grow the pie for all services.

Netflix looks well positioned for the upcoming changes in the industry as its vast library of originals gives it a strong position even as deeply rooted rivals like Apple and Disney join the fight.

Netflix CEO Reed Hastings has repeated the idea that Apple and Disney are direct competitors, and at a conference predicted that Internet television would rise for the next 20 years each year, while traditional pay-TV declines. As the Deloitte survey shows, Hastings seems to be on the pulse of the industry. Expect the rapid growth of Netflix to continue, even if Apple and Disney join the party.

Jeremy Bowman owns Apple and Netflix shares. The Motley Fool owns shares of and recommends Apple, Netflix and Walt Disney. The Motley Fool has the following options: long January 2020 calls Apple 150 and shortly January 2020 155 calls to Apple. The Motley Fool has a disclosure policy.


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