We expect the industry to get through the period of economic slowdown and falling real income of the population quite easily. This year the hot topic is the expected recession in the USA and the EU, which are the largest markets of streaming services. In this regard, we expect Netflix to remain the global market leader, although it shall lose some of the audience. The prospect of long-term struggle for the consumer is tied to the success of the original franchises. The SVoD market changed significantly last year, now it is mature, so attrition of the audience in favor of newcomers with completely different and original content is a consequential phenomenon but limited in scope. We believe that one of the main reasons is relatively low base. The main source of influence on the consumer is still the quality and quantity of content, because absorption and retention of users is mostly achieved by high-profile releases (Stranger Things by Netflix, Obi Wan Kenobi by Disney+, etc.).Ĭompanies that are relatively new in the streaming services market continue to increase their degree of influence, according to JustWatch. There are several key players in the streaming market now, forced to compete for the audience. The growth potential of such markets for streaming companies is significantly limited, the spread of services across large emerging markets, such as Asia and Latin America, is the main driver. In 2021, between a third and a half of population in developed countries had subscription to at least one of the services like Netflix or Amazon Prime ( AMZN), with many households being subscribed to several services at the same time. The slowdown is largely driven by widespread adoption of these services, according to Statista. According to Statista, the streaming market will grow at an average rate of 11% over the next six years. To some extent, the VoD market benefited from the COVID-19 pandemic: due to lockdowns, people were looking for virtual leisure activities, and streaming services were among the leaders due to abundance of content and affordability.ĭespite rapid growth over the previous 5 years, research agencies still predict further development of the sector, albeit at a slower pace. Streaming has almost completely supplanted the DVD market and manages to compete with cinemas.
Over the recent years, demand for streaming services has been rapidly growing. The video-on-demand market is a relatively young industry. Trends and prospects of the streaming services market We maintain a positive view on prospects of Netflix. The company's management has presented a strategic plan for the coming year, providing clarity on how the company shall cope with challenges. ( NASDAQ: NFLX) Q1 report created a good opportunity for long-term investors, and even after the subsequent positive report, there is still a high upside of the stock.
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