Netflix's global subscriber base has reached an impressive milestone, surpassing 300 million paid subscribers worldwide in the fourth quarter of 2024. This marks a significant increase of nearly 20 million subscribers compared to the previous quarter, solidifying Netflix's position as a dominant force in the streaming industry. Adapting to customer losses Netflix's growth has not always been consistent. During the first half of 2022, the streaming giant lost over one million customers. In response to these losses, Netflix introduced an ad-supported tier in November of that same year. This strategic move has paid off, with the lower-cost plan attracting 70 million monthly active users globally by November 2024, demonstrating Netflix's ability to adapt to changing market conditions and consumer preferences. Global expansion Netflix continues to focus on international markets, with a forecast suggesting that the Asia Pacific region is expected to see the most substantial growth in the upcoming years, potentially reaching around 70.1 million subscribers by 2029. To correspond to the needs of the non-American target group, the company has heavily invested in international content in recent years, with Korean, Spanish, and Japanese being the most watched non-English content languages on the platform.

Netflix is distinctly more popular with younger consumers in the United States than with older generations. According to the findings of a recent survey, around 75 percent of respondents aged 18 to 34 subscribed to Netflix as of mid-2021, compared to just 44 percent of those aged 65 or above.

Netflix predicts further subscriber loss

Netflix is the most popular subscription video-on-demand (SVOD) service worldwide. Millions of viewers from various demographics access the platform each day, but despite its availability in over 190 countries and its ever-expanding content catalog, Netflix reported a subscriber loss of around 200 thousand in the first quarter of 2022. It was the first time in over a decade that the streamer experienced a drop in user numbers, but according to the company, this downward trend might very well continue in the second quarter of the year. According to company reports, Netflix expects to lose an additional two million subscribers by mid-2022.

Cracking down on password sharing

Credential sharing has become an essential part of the video-on-demand (VOD) experience. Companies can stand out in today’s crowded streaming space by offering viewers to create multiple profiles and split subscription costs with other people in their household – which might be particularly appealing to younger audiences. Netflix is one of the first services to have provided multiple subscription options at various price tiers, but even so, the company has also acknowledged that millions of people share their login data without paying for additional accounts. In 2021, Netflix was estimated to have lost over 1.07 billion U.S. dollars in revenue due to password sharing. In 2022, the company reacted by announcing to charge additional sub-account fees for people streaming content outside the primary account holder’s household.

Netflix continues to dominate the UK streaming landscape, with 17.1 million households subscribing to the service in the fourth quarter of 2024. This marks a significant increase from 16.7 million subscribers in the same period of the previous year, demonstrating the platform's enduring popularity despite fierce competition in the video-on-demand landscape. Netflix's competitors While Netflix remains the leading subscription video-on-demand service in the UK in terms of customer numbers, Amazon Prime Video boasts the largest content library among major SVOD platforms, with over 42.6 thousand hours of content available as of May 2024. However, when it comes to market share based on user interest, Netflix still holds the top spot, edging out providers such as Amazon Prime Video, Disney+, and Apple TV+. Demographic preferences Interestingly, streaming preferences vary across age groups. Among viewers aged 65 and above, Amazon Prime Video is the preferred choice in the UK for 36 percent, while Netflix captures one-third of this demographic. This contrasts with the overall market dominance of Netflix, suggesting that older audiences may have different content preferences. The generational divide in streaming habits is further illustrated by data from Flanders in Belgium, where millennials show a slightly higher Netflix usage rate compared to Gen Z, both significantly outpacing older age groups.

According to the most recent data, 83 percent of consumers in the United States were using a subscription video-on-demand service in 2023, an increase of over 10 percentage points in five years. It is no secret that one of the most popular platforms (and certainly the one with the most U.S. subscribers) is Netflix. The number of Netflix streaming subscribers in the United States and Canada passed the 70 million mark for the first time in early 2020.

Netflix as the most used video streaming service in the U.S. To say Netflix has the monopoly on the U.S. streaming market would be an understatement, and with a wealth of original content appearing all the time, Netflix’s appeal is built to last. Data shows that Netflix has more viewers than Hulu and Amazon in the U.S., leaving services such as Disney+, Apple TV+, and ESPN+ trailing far behind. How to satisfy subscribers? However, the threat of new competitors could cause Netflix's subscriber base to dwindle if video consumers decide to go elsewhere. Upcoming services ranging from the long anticipated Disney+ to Warner Bros. Discovery's HBO Max and Discovery+ will likely draw some customers away from Netflix by virtue of what they can offer, and as new services enter the market, they will likely reclaim their own. Additionally, recent price increases in light of an upcoming recession led to losses in Netflix's subscriber numbers in the first half of 2022.

In the fourth quarter of 2024, Netflix generated total revenue of over 10.2 billion U.S. dollars, up from about 8.8 billion dollars in the corresponding quarter of 2023. The company's annual revenue in 2024 amounted to around 39 billion U.S. dollars, continuing the impressive year-on-year growth Netflix has enjoyed over the last decade. Netflix’s global position Netflix’s revenue has been heavily impacted by its ever-growing global subscriber base. The leading Netflix market is Europe, Middle East, and Africa, surpassing the U.S. and Canada in terms of subscriber count. Netflix has also significantly increased its licensed and produced content assets since 2016. Despite concerns among investors that the company’s content spend was negatively affecting cash flow, Netflix’s plans to amortize its content assets long-term along with generating revenue from other sources such as licensing and merchandise should ensure the company’s future profitability. Netflix’s original content Netflix is also fortunate in that many of its original shows have been a hit with consumers across the globe. Shows such as “Orange is the New Black,” “Black Mirror,” and “House of Cards” won the hearts of subscribers long ago, but newer content such as English-language shows “Bridgerton,” “Wednesday,” and “Stranger Things,” as well as local TV shows such as “Squid Game” have also been favorably reviewed and proved popular among users.

Netflix is currently facing the challenge of retaining subscribers worldwide, with data from the second quarter of 2023 revealing that Germany and Spain experienced the highest churn rates at nine percent. Australia followed closely, while France had a relatively low cancellation rate at just two percent. Impact of the new business model The subscription video-on-demand (SVOD) market has experienced a significant increase in the past decade, driven by major players, like Netflix, Amazon Prime Video, and Disney+. However, the anticipated slowdown in revenue growth, coupled with the increasing popularity of ad-supported content and subscription cycling, underscores the evolving dynamics of consumer preferences within the streaming industry. Netflix's introduction of a basic plan served with commercials in late 2022 had a significant impact on subscriber behavior in the U.S., with the ad-supported tier accounting for 30 percent of sign-ups in September 2023. Growth despite challenges Netflix's global position remains strong. With over 269 million paid subscribers worldwide, the company's revenue continues to grow, reaching nearly 9.4 billion U.S. dollars in the first quarter of 2024. While challenges persist, such as the increasing popularity of other streaming services and the impact of price increases on subscriber numbers, Netflix's plan to generate revenue from sources, like licensing, ads, and merchandise, positions the company for future profitability.

According to the most recent data, U.S. viewers aged 15 years and older spent on average almost three hours watching TV per day in 2023. Adults aged 65 and above spent the most time watching television at over four hours, whilst 15 to 19-year-olds watched TV for less than two hours each day. The dynamic TV landscape The way people consume video entertainment platforms has significantly changed in the past decade, with a forecast suggesting that the time spent watching traditional TV in the U.S. will probably decline in the years ahead, while digital video will gain in popularity. Younger age groups in particular tend to cut the cord and subscribe to video streaming services, such as Netflix, Hulu, and Amazon Prime Video. TV advertising in a transition period Similarly, the TV advertising market made a development away from traditional linear TV towards online media. While the ad spending on traditional TV in the U.S. generally increased until the end of the 2010s, this value is projected to decline to below 60 billion U.S. dollars in the next few years. By contrast, investments in connected TV advertising are expected to steadily grow, despite the amount being just over half of the traditional TV ad spend by 2025.