It’s fair to say few companies have managed to achieve both the financial success and cultural relevance that Netflix has. Not only is it the world’s top on-demand video streaming service in terms of subscriber count, but it also dominates popular culture in a way that its competitors struggle to carry off. Beyond those impressive achievements, the company is also often cited as the catalyst for the subscription economy. But how well do you know Netflix? And how is it shaping up in 2021? Let’s get into it.
The Need to Know Netflix Statistics
As of July 2021, Netflix now has over 209 million subscribers, including 72 million in the US and Canada.
Founded in 1997, Netflix’s first focus was on DVD rentals, making it an active competitor of the now-defunct Blockbuster.
In 1999 Netflix launched its monthly subscription service, a service that’s still going strong today. But, of course, the subscription service of 20+ years ago was different to today (no digital streaming in 1999!). Back then, Netflix built its reputation on being different from Blockbuster in that it offered flat-fee unlimited rentals without late fees, due dates, and shipping and handling fees. These differentiating factors made Netflix more appealing to people tired of being slapped with excessive fees from the main video rental rival, Blockbuster.
In 2000, Netflix managed to garner an impressive 300,000 subscribers, but things weren’t looking too good in other areas for the digital DVD rental start-up. At the time, its losses totaled a crippling $57 million. Concerned with its ability to stay afloat with the current business model, Netflix offered to be bought by Blockbuster. Essentially, the proposal was that Netflix would take care of the online side of the business, while Blockbuster would handle the delivery of DVDs. However, Blockbuster declined the offer, and the rest, as they say, is history.
But how did Netflix go from 300,000 subscribers in 2000 to over 209 million in 2021? Netflix has consistently earned new subscribers every year, with the numbers never dipping below the previous year. For example, by 2005, the company had 4.03 million subscribers, 6.15 million in 2006, and 7.32 million in 2007. When Netflix got into the double figures, subscriber count really started to snowball, eventually reaching where it is today.
47% of Americans prefer Netflix over any other video streaming service
It’s official – Netflix has won the race, and it’s not even close! A whopping 47% of Americans prefer Netflix to the other popular video streaming services. In second place was Amazon Prime Video, at 14%, then Hulu and Disney+, which came in at 13.6% and 13%, respectively.
But why all the Netflix love? If we had to guess, it would be down to Netflix’s ability to tap into the cultural Zeitgeist, producing original shows that become household names. Of course, the other streaming services have also had their successes in this area. For example, Hulu’s The Handmaid’s Tale and Prime’s The Man in the High Castle have undoubtedly left their mark on popular culture. However, Netflix continues to produce content that becomes a cultural phenomenon – the company finds the mark and then hits it with a sledgehammer.
Few shows have impacted popular culture like Stranger Things, Orange is The New Black, The Witcher, The Crown, BoJack Horseman, Dear White People, Bridgerton, The OA, and Narcos. If you’re reading this outraged that we didn’t mention your favorite Netflix original, that proves this point. That is to say, can you even name nine originals from the other streaming services and still have several more worthy titles floating in your head?
To prove Netflix’s dominance over culture further, following the release of The Queen’s Gambit, Chess.com added over one million new members each month and then 2.8 million in November. Chess channels on Twitch also surged. (Bloomberg)
Around 41% of Netflix users use the platform for free
Netflix ditched its 30-day free trial back in 2019, but according to a MoffettNathanson survey, 41% of users still access the platform for free. Account sharing – where paying users sharing their login credentials with friends and family – remains popular.
Despite constant rumors that Netflix is “about to crack down on account sharing,” no such measures have been implemented so far. So, why doesn’t Netflix want to turn the screws? Likely because a crackdown would put off legitimate users who are happy to share their accounts. It could also be because Netflix wants to make money, but they want eyes on their content more.
As of February 2021, the Netflix US Library contains over 1,800 shows and 3,600 movies
Today, it’s Netflix’s original shows that create the most buzz, so it’s easy to forget that there’s a gargantuan amount of content hiding behind the popular titles.
Interestingly, looking at the data from 2016, it appears that Netflix has fewer shows and movies today than it did five years ago. According to an analysis by Wall Street research firm Barclays, Netflix had 4,563 movies and 2,445 series in 2016.
So, why the drop in titles? It’s likely due to Netflix’s shift in focus. In the past, it seems their strategy was simply to buy up as much content as possible. In other words, they were attempting to stuff their catalog to the brim in the hopes that everyone could find something to watch. Today, they’ve shifted focus to creating or curating higher-quality shows. Additionally, Netflix has lost the licensing rights to many shows over recent years as the competition between streaming services becomes more fierce.
What Are People Watching on Netflix?
The Office was the most streamed Netflix show of 2020
Viewers watched The Office for a total of 57.1 billion minutes, making it the most-watched show of 2020. Grey’s Anatomy came in second place, at 39.405 billion minutes, and Criminal Minds came third with 35.414 billion minutes watched.
Ozark Was the most-watched Netflix Original Series in 2020
Ozark came in the number one spot of the most-watched original series at 30.462 billion minutes watched. The runners up were:
- Lucifer – 18.975 billion minutes watched.
- The Crown – 16.275 billion minutes watched.
- Tiger King – 15.611 billion minutes watched.
It’s important to note that these figures are from a list of the top streaming content of 2020 for original series across all streaming platforms. However, of the ten on the list, only one original series is not a Netflix title – Disney+’s The Mandalorian, which came in 5th place with 14.519 billion minutes watched.
Interestingly, the picture was much different for movie streaming in 2020. Out of the top ten most-streamed movies on on-demand video streaming services, only three titles were on Netflix, with the other seven being on Disney+. The top three most-streamed movies on Netflix in 2020 were Secret Life of Pets 2, Dr Seuss’ The Grinch, and Spenser Confidential.
Netflix has the highest number of high-quality original shows on any platform
A high-quality TV is defined as any show with a rating over 8.0 on IMDB and over 300 votes. When it comes to original shows, Netflix dominates in this area compared to its competitors. For example, Netflix has 151 high-quality original shows vs. 184 high-quality licensed shows. By contrast, Hulu has only 16 high-quality originals but 274 high-quality licensed shows.
Interestingly, while Netflix is the clear winner in terms of absolute numbers, HBO Max has a higher ratio of high-quality originals vs. licensed shows. HBO Max has 75 high-quality originals and 38 high-quality licensed tv shows.
Who’s Using Netflix? The Demographics
The median age of Netflix users is between 35-44 years
The median age of Netflix users has shifted over the last five years. Back in 2015, Millenials were firmly the median users of Netflix. However, in 2021, the picture is looking much different. Older adults are now taking a much keener interest in the streaming service.
65% of 18 to 29-year-olds and 30 to 44-year-olds in the US said they had a current Netflix subscription in 2020
Netflix is considerably more popular with people under the age of 44 than with any other age group. This could be due to familiarity with technology and a willingness to part with traditional cable TV (which tends to be unpopular with younger people).
Netflix isn’t hugely popular with Gen Z in the UK
According to a report on the UK’s most loved brands, Netflix came top for every age group except 16-24-year-olds – otherwise known as Generation Z. It turns out that Gen Zer’s prefer YouTube and TikTok, and Netflix doesn’t even make the top 10.
How Did Netflix Fare During the COVID-19 Pandemic?
- Total revenue in 2020 reached $25 billion, up from $20 billion in 2019.
- Paid membership rose 23% in Q4 of 2020 compared to the same period last year.
- Netflix added 37 million subscribers in 2020 and topped 200 million subscribers for the first time in history.
- The most significant push in subscribers came in Q1 of 2020, where many countries went into lockdowns. Netflix added 15.8 million paid users in this period.
2020 was an incredible year for Netflix, with both revenue and subscriber count growing substantially. In a world where people faced lockdowns and social distancing, streaming content at home became the norm.
The Financials
Netflix says it will be cash-flow neutral by the end of 2021 and positive every year after
There’s little doubt that Netflix is a successful company by many metrics. However, its financials often give investors headaches. The last time the company was cash-flow positive was an entire decade ago, in 2011.
But just why is Netflix in the red? For the last decade, Netflix has been putting everything into buying licensed content or creating its own originals. In recent years, the focus has been much stronger on the originals than anything else, and with good reason. Netflix, the company that paved the way for on-demand streaming, had the foresight to see that they wouldn’t be the only player in the game for long. As time went on, Netflix lost many of its licensed shows to companies that wanted to set up their own streaming services to compete with the giant.
It’s estimated that Netflix’s debt totals around $15 billion USD.
Ignoring the debt, Netflix is profitable. – Q2 and Q3 of 2020 saw operating income of over $1 billion for the first time in the company’s history
It might seem strange to overlook Netflix’s enormous debts, but the model appears to be working for them, with operating profits continuing to rise every year. Operating profit is a company’s earnings after all expenses are removed except for the cost of debt, taxes, and certain one-off items. In 2020, Netflix reached an operating income of well over $1 billion in Q2 and Q3. This was the first time the company has ever reached operating income this high, likely due to the coronavirus pandemic (more people being stuck indoors).
Netflix’s operating income really started to pick up in 2017 after a less profitable 2015 and 2016. For example, operating income in Q1 of 2015 was 97 million USD, and operating income in Q1 of 2016 was 49 million USD. By contrast, operating income stood at an eye-watering 257 million USD in Q1 of 2017. Moreover, 2018, 2019, and 2020 have seen healthy growth in operating income.
Wrapping Up – The Future of Netflix
At the start of 2021, Netflix said it had over 500 titles “currently in post-production or preparing to launch“
The streaming giant also said they planned to release a new original film every week in 2021. So, that’s 2021, but what can we expect from Netflix in the coming years? Where will the company be in 10 years?
Predicting the future is always challenging, but that doesn’t mean we can’t make a few educated guesses. As of August 2020, 78% of US households are subscribed to a video-on-demand service, and nearly 55% are subscribed to more than one. As the most popular of the streaming services, Netflix has a high market penetration rate currently. If Netflix continues to make ground outside the US, we could potentially see subscriber numbers topping 500 million in the next ten years.
However, Netflix will have to adapt to be more like its competitors, namely, Disney+. Disney+ is the fastest growing video streaming service, and as we saw earlier, it tops the charts for most popular movies in terms of minutes watched. Disney’s main advantage is family-friendly content, so Netflix will likely have to invest more time and resources in this area. With that said, Netflix might decide not to compete in this area since Disney seems to have the market cornered. Instead, they might opt for shows that target Millenials and Gen Z, hoping to create more cultural powerhouse shows.
Whatever the future holds, Netflix isn’t going anywhere anytime soon!