Which Streaming Service Will Stay On Top? Maybe Not Netflix.
Mention digital video, and Netflix is the first brand that pops to mind, and little wonder. Last year, the streaming service surpassed YouTube as the most-watched video service.
But that reign may not last long. A parcel of new video streaming services are biting at Netflix’s heels, and a new report suggests they may succeed in stealing away some of its hard-won market share.
That’s according to a forecast from eMarketer, the digital research firm, which predicts new competition in the digital video sector will encroach on longtime leaders Netflix and YouTube’s share of viewing, even as those services continue to see time spent watching them increase.
In 2018, Netflix moved ahead of YouTube with 23.2 average minutes per day of viewing, or 25.7% of all digital video viewing, vs. 22.3 minutes for YouTube (24.7 percent). But eMarketer predicts that in 2020, while Netflix’s daily average minutes spent will climb to 29, it will see its daily share of video viewing fall by 6.1% versus the previous year.
What does that mean? Overall time spent with digital video will rise over the next few years. But popular services will see their dominance erode in the face of so many new choices, including recently launched Disney+ and Apple TV+.
“Even though Americans are spending more time watching Netflix, people's attention will become more divided as new streamers emerge,” eMarketer analyst Ross Benes says. “The video streaming landscape will get crowded, which will drive down the share of time that people devote to Netflix.”
Netflix’s share of daily video time will peak this year at 27%, then drop to 25.7% within two years. It will remain ahead of YouTube, which will see a striking drop in share from 2017 (26.6%) to 2021 (21.7%).
With high-profile new services such as WarnerMedia’s HBO Max also slated to launch in 2020, Netflix will face greater competition. It’s losing some high-profile content (HBO Max is getting Netflix crown jewel Friends), too, which hurts.
As so many new services join the field, digital viewing will become more fragmented in the same way that TV viewing fractured when more people subscribed to cable television.
The other interesting part of the eMarketer forecast is just how much time people spend with digital video. This year for the first time, digital video will account for more than a quarter of all daily digital time, at 25.4%.
“Video streaming is a mainstream, daily routine for most U.S. adults, occurring on all devices and increasingly when viewers are on the go,” eMarketer senior forecasting analyst Oscar Orozco says.