Netflix could be near its cap for American subscribers, according to PwC’s Global Entertainment & Media Outlook 2019–2023 report. With Disney, Apple, and WarnerMedia set to hit the market with their own cheaper streaming services in the fall, PwC projects Netflix will have to turn to global subscribers to keep up.
“The first-mover advantage in streaming video that Netflix has capitalized on to date continues to be eroded, as the industry begins to fragment, with more and more companies entering the market, from pay-TV heavyweights to specialized, niche players,” PwC said.
Earlier this year, Netflix announced it was increasing its subscription prices, a move that some saw as telling for the company’s finances.
2019 could play out to be another record year for streaming services. According to the Motion Picture Association of America (MPAA), video streaming surpassed cable subscriptions for the first time in 2018.
PwC’s report notes that video-on-demand revenue hit $10 billion in 2018 and is projected to increase 12 percent to $17.8 billion in 2023, in tune with more major companies throwing their hats in the video streaming ring.
Streaming companies are not only in a battle for subscribers, but they are also having a content war. Netflix has proven its willingness to shell out loads of dough for original content, especially as it ramps up its efforts for Oscar wins. Netflix spent $8 billion on shows and movies on a profit/loss basis, according to the report. The company is expected to spend nearly $13 billion this year.
As Netflix focuses on its original shows and movies, Disney Plus will hone in on hit titles from across the Disney, Pixar, Marvel and Star Wars franchises. The company will build out its original content after its initial launch this fall. Apple is teaming up with big names like Oprah Winfrey and Prince Harry to launch an original docuseries and other shows for its platform Apple TV Plus.
Netflix will have to find new ways to keep its current subscribers while also luring in new customers, which could prove difficult. As the company nears its U.S. cap, it is likely to turn to new strategies internationally.