How Much Bigger Can Netflix Get?
The streamer will stop reporting global subscriber numbers publicly, a sign that it believes its subscriber base could be reaching maturity.
Netflix may feel that it no longer has anything to prove to its competitors. The streamer reported this week that it maintained its position as the world’s largest on-demand video service, adding 9.3 million customers to raise its global total to 269.6 million. The company still has important goals, such as passing the 10% of total TV viewing time; Netflix does not exceed this amount in any country in the world as of now. But it will no longer report its subscriber numbers publicly starting in 2025, begging the question of how much larger the streamer can truly get, and how it will boost engagement to reach the coveted 10% milestone it wants to reach.
- Greg Peters told analysts during the company’s earnings conference call that it reaches 500 million people around the world currently.
- Netflix continually finds itself second to YouTube in terms of total TV viewing time in the United States.
- Making live sports deals similar to its recent agreement for “WWE Raw” rights could help Netflix meet ints engagement goals.
Netflix co-CEO Greg Peters spoke with Wall Street analysts about where the company can go from here in the traditional quarterly conference call to discuss its earnings report. He indicated that the company believes it can grab “hundreds of millions” of new global customers in the coming years, and could have as many as 500 million households subscribed.
If Netflix does reach that goal, however, the public may not know it. Netflix confirmed in a shareholder letter accompanying its quarterly earnings report that it will stop reporting public subscriber numbers in 2025, a sign that perhaps its growth is about to level off. But adding hundreds of millions of new subscribers is not the only goal for Netflix; the company sees room to grow its engagement around the world, as well.
“We really like the kind of the opportunity ahead of us,” Netflix CFO Spence Neumann told analysts. “We’re less than 10% of TV share in every country in which we operate. There’s still hundreds of millions of homes that are not Netflix members.”
The 10% share Neumann refers to is the amount of total TV viewing time Netflix captures in each country. In the United States, Nielsen measured that in March 2024, Netflix captured 8.4% of total TV time in the United States, which is its highest number of the past year. Netflix mostly hovers between around 7% and 8% of total TV viewing time in the U.S., the highest of any paid streaming service but consistently second to YouTube.
How Will Netflix Grow Global Engagement Numbers?
There are a couple of ways for Netflix to boost its share of total TV viewing time around the world, if it wants to get pass the 10% threshold. In the United States, adding more sports could help. Netflix made its first-ever deal for a regular sports entertainment event this year when it picked up the rights to stream episodes of “WWE Raw” live in a 10-year, $5 billion agreement.
A recent survey found that 91% of U.S viewers subscribe to a service that allows them to watch sports, so there’s clearly an appetite for sports streaming. Netflix can satisfy this appetite if it continues to make live sports deals, despite resisting the impulse to pursue marquee sporting events for years.
Globally, making more content specific to the various regions in which Netflix is available could help it grow engagement. Viewers are more likely to watch titles set in their country or region, and Netflix’s international content outlay will surpass its domestic budget for the first time this year. The streamer clearly sees the benefit of making more locally-focused content, and it’s already working on doing so.
It seems that Netflix cannot rely on its mobile games to help it boost engagement, at least not yet. Netflix has released dozens of games for users to enjoy on mobile devices, and have even experimented with allowing viewers to play those games on smart TVs. But a report from August of 2022 suggested that less than 1% of Netflix customers played its games, and in January word circulated that Netflix may start bringing microtransactions and other paid features to its games in order to boost revenue from that segment. That move would likely not even be discussed if Netflix was seeing the engagement metrics it wanted from its games.
Netflix’s goals may seem hard to reach, but that’s what comes of being a leader in the industry. Every other service has to simply try and be Netflix, while Netflix has to continue building engagement to a level never seen by a streamer before, which is why its next big goal is to pass the 10% of total TV time milestone and even to grow beyond.
Netflix
Netflix is a subscription video streaming service that includes on-demand access to 3,000+ movies, 2,000+ TV Shows, and Netflix Originals like Stranger Things, Squid Game, The Crown, Tiger King, and Bridgerton. They are constantly adding new shows and movies. Some of their Academy Award-winning exclusives include Roma, Marriage Story, Mank, and Ma Rainey’s Black Bottom.