Report: Netflix Will Have Twice as Many US Subscribers as Cable within 5 Years

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Over the past several years, the streaming video industry has completely disrupted the entertainment industry, and at the forefront of it all has been Netflix paving the way. The streaming service has landed several major blows to the traditional pay TV business in recent years, and there’s no sign of things slowing down. Our latest projections show that within 5 years Netflix will have twice as many US subscribers as the country’s biggest cable companies combined.

For years now, Leichtman Research Group has been tracking subscriber numbers for major cable TV companies, including Comcast, Charter, Cox, Altice, Mediacom, and Cable ONE. Over the past 5 years, the country’s biggest cable companies have lost roughly 700,000 subscribers per year.

During that same time period, Netflix has been adding an average of 5.4 million US subscribers annually, according to the company’s annual reports. And while some have expressed concern Netflix’s domestic growth may be slowing in a saturated American market, the company added more domestic subscribers in 2018 (about 5.7 million) than it had achieved in a single year since 2015.

If you assume the major cable TV companies and Netflix continue the trend of their respective performances over the last 5 years, Netflix will achieve more than double the amount of US subscribers as cable TV at some point early in 2024, possibly even toward the end of 2023.  At that time, Netflix will hit around 86 million US subscribers while the cable companies drop down to 43 million customers.

netflix vs cable subscribers

Netflix has often said its goal is to reach 90 million US subscribers. While the company still needs to add a little over 30 million customers domestically to hit that number, our projections show that should happen by the end of 2024.

Netflix’s Path to Dominating Cable

While we believe Netflix will have twice as many domestic subscribers as the major cable companies within 5 years, nothing is guaranteed and the company will face some challenges along the way.

These challenges include:

Challenge #1: Reaching the small number of markets with low brand awareness

At this point, who hasn’t heard of Netflix? With 58.5 million US subscribers and an estimated 126 million households in the US, that means Netflix is already in about half of all American homes. It will be challenging for the company to find markets where low awareness of the streaming service exists.

There are some things Netflix can do, however, to maximize its reach in the US:

    • Get younger people who use Netflix without paying for it to sign up for their own accounts. Various studies have found that up to one-third of those who use Netflix don’t pay for the service. To date, Netflix has taken a hands-off approach to password sharing, but if the company wants to achieve better growth domestically, it may need to find a way to convert some of those users into paying subscribers. Some of this may resolve itself without requiring the company to crack down on password sharing as many younger users will grow to eventually pay for their own accounts.
    • Partner with more traditional pay TV companies. Last year, Netflix partnered with Comcast to give the cable company’s subscribers the ability to subscribe to Netflix through Xfinity. Pursuing more of this type of integration with traditional cable and satellite providers could help Netflix reach an older, less tech-savvy base of customers.

Challenge #2: Increased competition in the streaming space

With Disney, Apple, and countless others large and small planning to launch new streaming services, Netflix will face more competition than ever before in coming years. If not navigated properly, this could further slow domestic growth for the company.

For their part, Netflix claims it doesn’t believe new competitors pose a threat. “The market for entertainment is so big that there can be multiple firms that are successful,” Spencer Wang, the company’s vice president of investor relations, recently said.

As far as Netflix is concerned, the true battle for eyeballs isn’t against other streaming companies, but rather it’s being waged on other fronts against the likes of video games (the company has cited Fortnite in particular as a competitor), YouTube, and even sleep.

Challenge #3: Providing a compelling mix of original and licensed content

It’s no secret Netflix has been spending billions of dollars developing its original as a means of counteracting its significant loss of licensed content.

While the streaming giant has put out some buzzworthy originals — like Stranger Things, 13 Reasons Why, and Making a Murderer, to name a few — subscribers still want to see great licensed content too. After all, the most streamed series on Netflix is NBC’s The Office 63% of Netflix’s viewing and is still licensed content.

However, as Disney, NBCUniversal, Warner Media, and others launch their own streaming services, Netflix will lose even more licensed content in coming years.

Netflix execs say they aren’t worried about losing licensed content, but the simple reality is the service will likely have some of its most popular offerings like The OfficeFriends, and Grey’s Anatomy taken from them at some point in the not-too-distant future as the shows’ respective owners seek to reclaim the rights when they launch their own streaming services.

Just throwing tens of billions at developing more original TV series and movies may not be enough on its own to keep the company growing domestically at the rate needed to reach its goal of 90 million US subscribers. The company needs to find a way to still offer viewers an enticing collection of popular licensed content along with its expanding original content, all without letting content costs skyrocket out of control.

While Netflix does face obstacles to its domestic growth, the fact is they are still the blue chip in the streaming industry, and many analysts believe the company is still largely in control of its own destiny. We firmly believe the company will hit the mark to have twice as many subscribers as cable TV in the next 5 years.

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