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Netflix’s share of the online video market is shrinking.
That’s the takeaway from two new reports out this past week, the first of which comes from Parrot Analytics, a startup that measures audience interest in online TV shows. According to Parrot, Netflix accounted for about half of the original series people around the world wanted to watch online in the first quarter of 2021.
While Netflix is still far and away the dominant player, its market share is in decline. Two years ago, Netflix accounted for 64.6% of demand.
The decline is even steeper in the U.S., where Netflix accounted for 48.1% of demand, the first time it’s ever been below 50%. (This may have something to do with Netflix’s more limited output in the first quarter of the year, though that doesn’t explain the two-year trend.)
A report from Ampere Analysis painted a similar picture. Netflix’s share of subscribers in the U.S. has dropped 31% in one year.
You could read these two reports and become convinced that the jig is up. Netflix’s long awaited funeral is finally here. Legacy media beat back the disruptor, and we can all go back to worshipping the House of Mouse.
But is that what these numbers mean? Despite concerns that Netflix would be the next great technology monopoly, Netflix was never going to be the only online video network people used. Google – our one true king – can dominate search because it has access to all the relevant information it needs. It creates a better and better product by using all your searches to make its results better and better.
Netflix was never going to have access to every single TV show or movie. In fact, its access to catalogs shrank as it shifted from being a tech company that distributed other people shows to an entertainment company that makes its own. And now that it’s an entertainment company, it really can’t be a monopoly. No company can monopolize creativity, not even Disney.
The data from Parrot and Ampere reflects that Netflix, once one of just a couple players in its market, is now competing for attention with Disney+, HBO Max, Peacock, Apple TV+, Paramount+, Discovery+, as well as Amazon and Hulu. More people than ever are watching video online, and Netflix isn’t the only place they are watching.
Here is a list of the most in-demand shows during the first quarter. Netflix accounts for 7 of the 10, but Disney+ and Amazon have entries as well. (And Disney+ has the two biggest.)
The real question, which none of this data really answers, is whether this loss of share means interest in Netflix is sagging. We know people are watching less live TV, and leaving cable and satellite packages. We know people are watching more video online.
But as people leave cable and satellite for streaming, are they just watching video online in more places, or are they watching less Netflix? If they are watching less Netflix, they are more likely to cancel. That would be bad for Netflix.
The company has pushed back on this narrative, noting in recent quarters that its average user is spending more time on Netflix. The good news is we leave the realm of speculation in a couple days. The company reports earnings Tuesday. -- Lucas Shaw
The best of Screentime (and other stuff)
Taylor Swift’s grand experiment
Taylor Swift has the No. 1 album in the U.S. with a record she first released in 2008. “Fearless (Taylor’s Version)” is the first installment in her project to rerecord the six albums she released under her first record deal.
Swift says she is doing this because she doesn’t own the originals. She left Big Machine in 2019 and assailed its leader, Scott Borchetta, as well as Scooter Braun, who bought her label and then sold her first six albums to Shamrock Capital.
Her campaign hasn’t reduced interest in those records she doesn’t own. The rereleases have boosted listenership of her past work, enriching the very people she is fighting.
But, it does set an interesting precedent. Her rerelease scored the biggest debut week of any album this year, which is notable since rereleases are usually for hardcore fans, not the masses.
Swift is, as usual, ahead of the curve. Artists are demanding more and more ownership, and Swift’s success may embolden some of her peers to do the same. I don’t think it will embolden everyone. Recording your old music is time-consuming and expensive. It also may not appeal to people who are happy with their initial work. But there is little doubt a few others will try this.
But what I wonder – and what I don’t know – is whether the demands for ownership in the music business will spread to Hollywood. Film and TV have been moving in the opposite direction, where a handful of small companies want to own everything. Securing ownership as a TV producer or a film director has never been harder, at least at the highest level.
And yet you’ve got a lot of producers and studios who would like to own, and a new class of digital creator that wants ownership or control as well.
Warner Bros. is ruling the box office
The No. 1 movie in the U.S. is "Godzilla vs. Kong" for the third weekend in a row. Warner Bros. has dominated the box office so far this year, bailing out theaters with its plan to release movies in theaters and on HBO Max at the same time.
The irony is rich on this one. Theaters bemoaned Warner Bros.' decision as the end of their business. Warner Bros. swore they would thank them when the time came. Right now, looks like Warner Bros. was right.
The ArcLight is closing – until someone buys it
The owner of Pacific Theatres and ArcLight Cinemas said it would not reopen the cinemas, a psychological blow to the movie business just as it appeared things were getting better.
Though this is a relatively small chain, ArcLlight operates the nicest theater in the heart of Hollywood, while Pacific operates two other high profile Los Angeles theaters – the theaters at the Grove and Americana malls.
Most people in the film business believe someone will buy some or all of these locations. Potential buyers include a rival chain like Cinemark, a streaming service/studio like Netflix or a wealthy cinephile like Megan Ellison. Smart money is on another chain, unless it’s sold piecemeal.
Scott Rudin will ‘step back’ from his Broadway work
The producer apologized for the abusive behavior detailed in a piece by The Hollywood Reporter’s Tatiana Siegel. What does taking a break mean? Unclear. It could be an empty commitment, it could be a real commitment.
But it is the first time his behavior, well-known in the industry for years, has caused him to do anything.
Netflix dominates in South Korea
Remember when everyone talked about how much money Netflix lost? Well, not only is the company profitable around the world, it is profitable in South Korea for the first time. Experts project the service will grow to 5.3 million subscribers by the end of the year.
Deals, deals, deals
- Televisa agreed to sell its content assets to Univision, of which it is the largest shareholder. The two companies are attempting to create a Spanish-language media company large enough to compete in the global marketplace with Netflix, Disney and Amazon.
- Amazon is spending $465 million to produce the first season of “Lord of the Rings.”
- Amazon also said it now has more than 200 million Prime customers. This will be cited as the number of people using Prime Video. It’s not.
Weekly playlist
Since I took a week off, I didn’t get a chance to say anything about his DMX. X had my favorite voice of any rapper ever; his gravelly bark created the soundtrack to many of my favorite songs. This is one case where Spotify’s “This Is” playlist is a great feature. It’s been my go-to for two weeks running.
Also, I used some of my free time to binge all of “Last Chance U: Basketball.” Don’t be put off if you don’t like sports. This is a humanistic documentary for anyone who cares about team work, underdogs or second chances.
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