Netflix to court older viewers as flow of young fans slows down
Netflix is set to report the smallest growth in subscribers in a decade, as the flow of young fans who have fuelled its meteoric rise slows down, leading it to target tech-wary over-55s.
The streaming giant expects to have added just 1 million new subscribers globally when it reports its second quarter results on Tuesday, the lowest number of new signups since 2011, when the business suffered the growing pains of splitting its Dvd-bypost and streaming operations, theguardian.com wrote.
Last year’s record increase of 37 million subscribers took its global user base to over 200 million, as the pandemic drove new viewers to seek out shows such as ‘The Crown,’ and ‘Bridgestone’ to cope with lockdown boredom.
This unprecedented “pull forward” in new subscribers – those who hastened plans to sign up – explains why its rate of growth this year is so worryingly anaemic.
“It’s just a little wobbly right now,” said founder Reed Hastings in April, brushing off the $20bn (£14.5bn) fall in the company’s share price after Netflix missed its first quarter new subscriber target by 2 million.
However, behind the numbers Netflix is attempting to tackle an age problem: It needs old(er) people to become subscribers.
Two-thirds of Netflix’s 207 million global subscribers reside in Europe and North America, once booming markets that have begun to stagnate.
The reason is that Netflix has tapped out the tech-hungry younger demographics – 80% of people aged 18 to 34 in the UK are now either subscribers or have access through their families or shared passwords, according to research from Ampere Analysis. The figures are almost identical in the US, the company’s home market and also its largest.
Netflix has been forced to start picking its way up the age chain. The 35-44 age bracket has already mostly been won over, with about 70% now having access, while the 45-54 demographic shows more scope for growth at 62%.
However, the real opportunity is among those aged 55 to 64, who have put their tech-wariness aside to give streaming a go to alleviate lockdown tedium. Between the third quarter of 2020 and the end of March the proportion of internet-connected people in this age group who have subscribed to Netflix jumped from 38% to 50%.
It is no surprise that as Netflix has grown older – the former upstart launched its streaming service 14 years ago – it is experiencing demographic and geographic change as it looks to new regions such as Asia and Latin America as well as older users in mature markets.