November 7, 2019
It’s no secret Netflix subscriber growth is slowing as the SVOD pioneer reaches market saturation. The service is projected to reach 165 million subs worldwide at the end of the current fiscal quarter, ending Dec. 31.
That reality at a time when high-profile competitors such as Apple, Disney, WarnerMedia and NBC Universal enter the streaming video wars underscores why Netflix co-founder/CEO Reed Hastings is hoping Wall Street and others will shift their focus from sub growth to viewing hours.
Speaking Dec. 6 at The New York Times DealBook confab in New York, Hastings said time spent streaming content should become the new metric underscoring a service’s success.
“You’ll hear some subscriber numbers but you can just bundle things so that’s not going to be that relevant,” Hastings said. “So the real measurement will be time — how do consumers vote with their evenings? What mix of all the services do they end up watching?”
Earlier this year Streaming Observer concluded Netflix subs worldwide spent 164.8 million combined hours a day watching content — and in the process used nearly 500 million GB of data on a daily basis.
Indeed, Hastings’ comment may ring true as nascent competitors such as Apple TV+, Disney+ and HBO Max offer free service to in-house and third-party platforms such as Verizon and AT&T. Apple is offering its service free for one year with any Apple hardware purchase.
Netflix itself has a promotional free year of service with select T-Mobile service plans.
Hastings contends most consumers will subscribe to multiple services, reiterating that he will personally subscribe to Disney+ (“They have great shows!” he said) upon its Nov. 12 launch.
At the end of the day, Hastings is betting consumers will lean toward established brands with proven track records in the SVOD space.
“When you think, ‘Do I turn on cable, do I turn on YouTube, do I turn on Netflix?’ we want you to choose Netflix,” he said.