GlobalData: U.S. & Europe “Netflix’d Out”


The U.S. and Europe are “Netflix’d out,” according to GlobalData, which points to emerging markets such as India as a path forward for growth for the streaming giant.

Francesca Gregory, associate analyst at GlobalData, commented: “Netflix’s results may have come as a surprise to some, as the platform’s content has been strong. However, being a big spender won’t necessarily grow subscriber numbers in the company’s traditional markets. The U.S. and European markets are completely saturated, with customers having a growing number of competitors to choose from. Therefore, streaming companies’ mantra of ‘content is king’ is no longer guaranteeing ideal subscriptions growth. Netflix will need to refine its emerging economy strategy, which has been seriously lacking.”

Netflix is expected to spend $18 billion on content this year; however, this will “fail to attract” new subscribers unless the company recognizes that many of its markets are reaching “peak Netflix,” the data and analytics company says.

GlobalData says that India holds a lot of promise for Netflix, with SVOD penetration in the country expected to increase from 24 percent in 2021 to 42 percent in 2026 and streaming subscriptions forecast to reach 191 million by 2026.

Gregory continued: “India holds one of the greatest opportunities for growth. While Netflix has been slow to act here, its competitors have moved early and secured their positions—with a third of Disney+ subscribers emanating from the country, for example.”

GlobalData believes that Netflix has yet to unlock the potential of the Indian SVOD market due to a lack of regionalized content and high prices.

Gregory said: “If the company wants to spend big, surely it can spare a portion to grow its local Indian content? As for price, the company may have already slashed prices to accommodate lower disposable incomes in India, but its initial lack of affordability cost the company its market position. Netflix currently trails well behind competitors in the country, holding just 4 percent market share while Disney+ holds 68 percent.

“Netflix will need to work hard to address these problems going forward. One way is regionalized content initiatives. In the past, the company has been criticized for confusing its cultural references in its original shows. Further blunders like this will stifle any hope of Netflix reversing its weak position in India.”