Netflix’s subscriber growth rate in the UK was surpassed by both Amazon Prime and Now TV this year according to UK measurement body, the Broadcasters’ Audience Research Board (BARB). Netflix remains the dominant subscription video on-demand (SVOD) service in the UK, but its growth rate is slowing down, while rivals are gaining pace.
BARB’s data shows that SVOD services are still growing strongly within the UK, achieving 24 percent growth over the past year, and there is still plenty of room for further expansion. BARB finds that nine million UK households are subscribed to at least one SVOD service, and projects that there are over 12 million subscriptions to SVOD services overall (given that many households will subscribe to more than one service).
Netflix is still far and away the dominant SVOD service, with the company’s 7.5 million UK subscribers more than those of Amazon Prime and Now TV combined. Netflix’s growth rate of 22 percent however was outpaced by both rivals, with Amazon Prime seeing 51 percent growth and Now TV seeing 70 percent growth over the past year.
These growth rate differences aren’t insignificant, since if all three maintain these current growth rates, Amazon Prime’s subscriber count would overtake Netflix’s within four years and Now TV’s would overtake it within six. The reality though of course is that Netflix is likely closer to saturation than its rivals, meaning it will naturally struggle to boost subscriptions at the same rate.
Even if rivals do continue to catch up, this doesn’t necessarily hurt Netflix, as the report highlighted the high levels of crossover between the services. Around 2.3 million are subscribed to both Netflix and Amazon Prime Video, representing 31 percent of Netflix’s subscriber base, and 60 percent of Amazon Prime’s. For the moment, many are happy to spend on more than one of the big SVOD services to access the content they want.
But competition could become fiercer as the market fragments. Within production companies like Disney planning to silo their content within their own subscription services, and the likes of Netflix and Amazon becoming more dependent on original content to pull in and maintain subscribers, content could end up split over a large number of competing SVOD services. If this happens, audiences may be forced to be more selective about which services they pay for.
BARB says SVOD services should be interested in where their audiences overlap with each other, to plan for such an eventuality. “Should price points for these services become sensitive to consumers, these overlaps will become ever more important for how each operator markets its services, not only in terms of competitive pricing, but also in the types of programming that drives subscriptions,” says the report.