Netflix is still king of the streaming world in the U.S., but its dominance is expected to slip slightly as competitors like Hulu and Amazon Prime Video take on more market share and new services enter the streaming space, according to a new forecast from the research firm eMarketer.
By the end of 2019, 158.8 million viewers are expected to watch Netflix programming, according to the firm, with the streaming service posting continued growth. Nonetheless, it’s expected that Netflix will reach 87% of the overall streaming viewers, compared to the 90% share it captured five years prior.
Netflix’s hold on the market will slowly but steadily decline over the next five years, eMarketer predicted, dipping to a little over 86% of total over-the-top (OTT) video service users by 2023.
What people are watching besides Netflix
As Netflix’s dominance declines slightly, Amazon Prime Video and Hulu are steadily growing in market share. Amazon Prime Video will close out 2019 having retained its position as the second-largest subscription OTT service provider, reaching about 52.9% of OTT viewers in the U.S. The service is expected to have 96.5 million viewers this year, an 8.8% increase from 2018.
By 2021, the number of people watching Amazon Prime Video is expected to equal a third of the U.S. population, the report found.
Hulu, meanwhile, is estimated to reach 75.8 million U.S. viewers in 2019, or about 41.5% of subscribers to OTT video services. The number of U.S. viewers is a steady 17.5% increase in viewers from a year ago, but it’s growing at a lower rate than the service enjoyed in 2018, when it saw 49.6% year-over-year growth in individual users compared to 2017.
Overall, eMarketer predicted that 182.5 million people in the U.S., or about 55% of the population, will watch content on subscription over-the-top services in 2019.
The report didn’t account for the amount of market share that might be eaten up by new services currently in the works. Disney+ and AppleTV+ are both slated to launch this year, while HBO Max and NBCUniversal’s streaming service are expected to join the fray in 2020.
“While there is no true ‘Netflix killer’ on the market, Disney’s upcoming bundle with Disney+, Hulu and ESPN+ probably comes closest,” eMarketer forecasting analyst Eric Haggstrom said in a statement. “Netflix’s answer has been to stick to what has made it the market leader—outspending the competition on both licensed and original content, offering customers a competitive price.”
Is there room for more streaming services?
Even though Netflix’s market share might be waning, growth in streaming isn’t an entirely zero-sum game. eMarketer has previously reported considerable subscriber growth across virtually every service the company tracks, and U.S. OTT viewers, on average, subscribe to more than one streaming service.
“The market for streaming video has been driven by an explosion in high-end original content and low subscription costs relative to traditional pay TV,” Haggstrom said. “A strong consumer appetite for new shows and movies has driven viewer growth for services like Netflix, Hulu and Amazon Prime Video, as well as the broader market.”
In July, Netflix missed its subscriber growth forecast, causing the stock to tumble, but the company told investors price increases were to blame, not an increasingly competitive landscape. The company has emphasized that its continued investment in original programming will pay off in the form of attracting new subscribers and retaining existing customers.