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If you were hoping to add some live sports to your Netflix viewing options, sorry to disappoint you.
In the wake of a series of genre-busting content and platform deals that have blurred the lines between broadcasters and subscription video-on-demand (SVOD) providers, Netflix flatly rejected the possibility of live sports programming on its platform.
“Investors ask us about Amazon’s move into NFL football,” the company said in a statement as it released its Q1 2017 results. “That is not a strategy that we think is smart for us, since we believe we can earn more viewing and satisfaction from spending that money on movies and TV shows.”
Netflix’s confidence in its existing business model was borne out by the company’s results for the quarter: Revenues increased 35%, while the service added 5 million new members.
The streaming video ecosystem is becoming more and more fragmented. Companies like Hulu are no longer just focusing on on-demand services, but are venturing out into live television.
Netflix, a company that has long concentrated on on-demand, commercial-free viewing, is going to continue its efforts in that area, rather than expanding in the direction of live, ad-supported programming.
On Monday, the company reported that its Q1 2017 streaming revenues surpassed $2.5 billion.
eMarketer estimates Netflix will have 128 million viewers in the US this year, up 6.6% from last year. While the company’s growth has slowed in the US, it has moved aggressively into multiple international markets.
Indeed, the company noted that the US and other established markets have been funding international expansion for several years. “Because of that, the major indicators of our progress were member and revenue growth and US contribution margins,” it said. But starting this year, Netflix suggested, the primary metrics of its success will be revenue growth and global operating margins.
“The company needs to plan for a future in which its US business is virtually saturated, and overseas growth starts slowing,” said Paul Verna, eMarketer principal analyst focused on digital video. “At that point, Netflix might disrupt itself again, as it’s done throughout its history with innovations such as DVDs by mail, subscription monetization, digital streaming and original content.”
Paid media advertising outlays worldwide will increase 7.3% in 2017 to $583.91 billion. Growth will be roughly on par with previous estimates, and spending will rise at a steady pace throughout the forecast period, driven by increased investments in digital and mobile ads.
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