After years of riding high on the wave that it essentially set in motion, Netflix stock has tumbled 25% since last week after reporting significantly lower-than-anticipated prospects for 2022 subscriptions. Disney and Roku stocks also fell, leaving everyone wondering about the future of the video-on-demand streaming market.

CivicScience has closely watched the competition for video streaming real estate heat up over the course of the pandemic, witnessing unprecedented rates of cord-cutting coinciding with increasing demand for more on-demand options.

Recent survey data reveal that among the three-quarters of U.S. adults who now subscribe to video streaming services, 50% subscribe to three or more services. 

The line graph below illustrates how rapidly streamers have multiplied their subscriptions over the course of the pandemic, especially among subscribers of four or more services. As the rate of single subscribers fell precipitously between late 2019 and today, four-plus subscribers have more than doubled, surpassing single subscribers.

A narrowed look at subscription trends among regular Netflix users depicts a nearly identical build-up to a very similar fragmented picture today. Among current weekly Netflix users (as of January 1), more than half also subscribe to three or more services. 

At the same time, Netflix subscribers appear to be using the service less frequently, likely in lieu of other streaming services. The rate of weekly viewers backslid from a 2020 high of 66% to 54% today (quarterly averages).

In addition, 38% percent of U.S. adults say that Netflix has the best selection of original content compared to seven leading competitors, down from 45% in 2019 Q4.

A diversified market, coupled with “churn and return” trends and a growing sense of content dissatisfaction among young streamers, has turned video-on-demand streaming into a battleground. 

Still, Netflix isn’t exactly being replaced – it continues to dominate among streaming services in the US. A potentially saturated subscription rate brings into question whether alternative subscription models may benefit the media titan, such as also offering a free ad-supported version (similar to Hulu). 

Gauging interest, a survey of more than 1,600 U.S. adults finds that more than one-third of people who do not currently use Netflix are likely to sign up for a lower-priced or free version. At the same time, more than one-third of current subscribers (excluding Netflix users who are not account owners) say they would downgrade to a free version.

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