Netflix is ââset to record the weakest growth in subscriber numbers in a decade next week, as the flow of young fans that fueled its meteoric rise slows, leading it to target the suspicious over-55s. of technology.
The streaming giant expects to have added just one million new subscribers globally when it releases its second quarter results on Tuesday, the lowest number of new signups since 2011, when the company suffered. the growing difficulty of dividing its DVD operations by post and streaming. .
The record increase of 37 million subscribers last year brought its global user base to over 200 million, as the pandemic pushed new viewers to seek shows such as The Crown, The Queen’s Gambit and Bridgestone to deal with the boredom of lockdown.
This unprecedented âpull aheadâ of new subscribers – those who rushed the subscription plans – explains why its rate of growth this year is so anemic and worrying.
“It’s just a little wobbly right now,” founder Reed Hastings said in April, wiping out the $ 20 billion (Â£ 14.5 billion) drop in the company’s stock price after Netflix missed its goal of new subscribers in the first quarter by 2 million.
However, behind the numbers, Netflix is ââtrying to tackle an age issue: it needs (older) people to become subscribers.
Two-thirds of Netflix’s 207 million global subscribers reside in Europe and North America, once booming markets that have started to stagnate.
The reason is that Netflix has tapped into the tech-hungry young demographics – 80% of people aged 18-34 in the UK are now either subscribers or have access through family or shared passwords, according to one. Ampere Analysis study. The numbers are almost identical in the United States, the company’s home market and also its largest.
âNetflix has become a victim of its own success,â says Richard Broughton, media analyst at Ampere. âIt’s so mass-marketed in many of its more established territories, like the UK, Europe and the US, that it has already largely recruited all young audiences. Growth among young people has slowed considerably, if not stagnated, in some markets over the past two years. “
Netflix was forced to start climbing the ranks. The 35-44 age group is already largely conquered, with around 70% of them now having access, while the 45-54 age group has more room for growth at 62% .
However, the real opportunity lies among those aged 55 to 64, who have put their technological mistrust aside to give streaming a try to ease the boredom of the lockdown. Between the third quarter of 2020 and the end of March, the proportion of people connected to the Internet in this age group who subscribed to Netflix rose from 38% to 50%.
âNetflix slowly worked on each of the age groups, selecting them,â says Broughton. âNow the fastest growing subscriber group is the 55+ age group. It is clear from our research on ordering models that there is a targeting of productions of genres that particularly appeal to older consumers.
âYou tend to see older consumers prioritize crime and documentaries – those genres have been underserved in Netflix’s Originals catalog. Netflix was more tackling genres like fantasy, action, and horror which tend to appeal to younger groups more.
It’s no surprise that as Netflix ages – the former upstart launched its streaming service 14 years ago – it is experiencing demographic and geographic shifts as it turns to new regions such as the ‘Asia and Latin America as well as older users in mature markets.