A new report issued by data and digital media research firm eMarketer has announced that Netflix remains the dominant Subscription Video On Demand (SVOD) service in the United States. According to a Forbes analysis, Netflix will have a subscriber base of 128 million individual users by the end of 2017, marking a 6.6% increase from the previous year. Netflix currently boasts an estimated 66% of the domestic streaming video-on-demand subscribers in the U.S. alone. Compared with Amazon’s 85.3 million subscribers and Hulu’s 32 million, Netflix is the clear standout winner on the American streaming market.
According to eMarketer Principal Analyst Paul Verna, however, those subscribers don’t tell the entire picture. Verna told Forbes that Netflix’s spending and cash flow has been a source of speculation and concern over the last few years:
If the company is unable to extend its recent streak of beating analysts’ expectations, investors will question whether its aggressive content budget, expected to reach $7 billion this year, is sustainable in light of increasing competition from the likes of Amazon and Hulu.
According to their first-quarter 2017 earnings report, the streaming video-on-demand service won’t actually turn a cash profit for some years. While Netflix certainly has enough subscribers, the company is spending money left and right on its highly-rated original content and even a rumored upcoming Hollywood studio. That kind of spending has put Netflix on par with major Hollywood television and film studios who are now feeling the pinch of a new competitor in their midst – and a new type of competitor. Netflix’s push for original streaming content was unprecedented, and other streaming services have been playing catch-up ever since. Luckily for Netflix, the onslaught of top-shelf original programming shows now signs of stopping anytime soon. You know how it goes: you gotta spend money to make money.
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