The latest streaming platform results reveal a competitive landscape, with Netflix showing a decline in market share and interest among younger audiences. While Netflix gained 5.1 million subscribers in Q3, it lost 7 percentage points in usage compared to two years ago. Meanwhile, Max surged to become the fourth most consumed platform, boosted by Warner Bros’ catalog and the Olympic Games. The overall trend indicates shifting demographics, with younger viewers increasingly disengaged from subscription services.
The streaming landscape is evolving with new competitors emerging, a decline in engagement among younger viewers, and a noticeable drop in original content. Recent quarterly reports from various streaming services reveal a divided scenario: while some are experiencing growth, others like the market leader are facing challenges.
Although Netflix reported a strong third-quarter performance, adding 5.1 million subscribers—exceeding the anticipated 4 million—its dominance is waning. In fact, compared to the same quarter two years prior, Netflix has lost 7 percentage points in usage share.
According to Philippe Bailly from NPA Conseil, Netflix, like other platforms, is grappling with the “test of engagement” as viewers frequently shift between services. Consequently, their primary focus must now be on subscriber retention.
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Max Rising in Popularity
Netflix has managed to reassure investors with its latest financial update, with stock prices rising approximately 10% since mid-October. However, the latest Médiamétrie SVoD Barometer, shared by NPA Conseil, indicates a different reality. Netflix has seen a 7-point drop in usage share from the third quarter of 2022, while Disney+ experienced a 4-point decline.
The increased market share has primarily benefitted Amazon Prime Video, which gained 3 points over the past two years. Nonetheless, the arrival of Max on June 11 significantly altered the streaming landscape. Now the fourth most popular platform, Max has captured a 5% usage share in its initial operational quarter, trailing behind Disney+ (11%), Prime Video (19%), and Netflix (62%).
Max’s success can be attributed to a variety of factors, including the visibility gained from Olympic coverage via Eurosport and a robust lineup featuring many Warner Bros. licenses along with HBO productions such as House of the Dragon and The Last of Us. Upcoming shows like Dune: Prophecy and a series set in the Harry Potter universe have further heightened expectations.
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Declining Interest Among Younger Audiences
The Médiamétrie SVoD Barometer reveals a concerning trend: the share of users under 35 is declining, despite this demographic traditionally being a key target for SVoD platforms. Over the last two years, their representation decreased from 45% to 38%, aligning more closely with their actual population percentage (38% usage versus 30% of the total population), according to Philippe Bailly. Additionally, the average daily consumer count has dropped from 8.9 million to 8.1 million in two years.
Conversely, the segment of users aged 35-49 has grown from 32% to 36%, as has the over-50 demographic, increasing from 23% to 26% during the same time frame.
Several factors contribute to these shifts. Firstly, viewership of original series has halved over the past 15 months. Additionally, periodic subscription price increases tend to affect younger consumers, who generally have lower incomes, making it challenging for them to maintain multiple subscriptions or remain loyal to a single service without perceiving additional value.
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Opportunities for Growth in the Streaming Industry
As streaming platforms look for solutions to their challenges, subscription rate hikes often seem like an attractive option. Recently, Disney+ implemented a price increase, and reports suggest that Netflix might also consider a similar approach. While raising prices could enhance revenue for producing more original content, it’s crucial that subscribers perceive continued value in the service, as noted by analysts in Variety.
In essence, platforms must tread carefully to avoid losing subscribers and inadvertently driving them toward illegal streaming alternatives. For example, DAZN’s high prices and subpar service led many football fans to seek out illegal IPTV options.
Additionally, platforms could revitalize interest by tapping into nostalgia, such as reviving classic series. Netflix, for instance, reintroduced Prison Break and Lost, with the former quickly climbing to the global top 10.