Will Netflix Peak by 2020?

/ Oct 11, 2013

NF

Senior analyst at The Diffusion Group, Bill Niemeyer has a less-than positive outlook on Netflix six years down the road.

In a recent report written by Niemeyer titled “The Challenges of a Maturing Netflix,” the analyst explains that the streaming service will continue to grow over the next five years. However, in 2020, Niemeyer and TDG are predicting that “domestic market forces will cause US Netflix subscriptions and streaming consumption to level out around 2020.”

Based on research, TDG suspects that Netflix will continue to grow internationally at this time. However, domestically, the streaming service will hit its pinnacle.

Launching its over-the-top streaming service in 2007, Netflix has seen incredible growth. The streaming service currently has around 38 million users across 40 countries. In six short years, Netflix has become the leading name as an OTT provider, proving on occasion to be quite the thorn in the side of the TV industry.

But how long can it last? Already, dozens of media companies are joining the OTT boom, including Amazon and Hulu. Only yesterday, Liberty Media chairman John Malone spoke about the importance of cable providers banding together to dethrone the streaming site. Netflix, in its success, has put itself square in the crosshairs of every cable and content provider threatened by its growth. The market for OTT services are only getting more saturated. Netflix is at the head of the pack now, but surely that can’t last forever.

The second factor that could lead to Netflix’s stagnation is a lack of room to grow. Netflix is available on devices like Roku, Xbox 360, PS3, and smartphones and tablets. But beyond connected TVs, the streaming service, which also fashions itself as a TV programmer, is not easily available on the biggest screen in the house. In order to continue growth in the United States, Netflix would need to find ways to appear on TVs sans technology like Chromecast or Apple’s AirPlay. As you might have guessed, Netflix knows this and has already locked in deals to natively appear within the TV experience for several European programmers. Domestically, though, it’s an entirely different story.

Then again, Netflix revolutionized streaming media in six years; who can imagine what it will achieve in six more?

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