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Netflix wins over British viewers

News, 30 March 2016
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LONDON: Netflix, the US streaming service, has signed up an estimated 5m subscribers in the UK and industry analysts attribute its success to popular content, competitive pricing and effective marketing.

According to recent figures from the Broadcasters Audience Research Board (BARB), around a quarter (24%) of UK households subscribed to Netflix in Q4 2015, up from 14% in Q1 2014.

That meant Netflix's UK service grew by 1.4m in the year to end-Q4 2015, making it by far the largest streaming service in the UK when compared to its nearest rivals, Amazon Video and Sky's Now TV.

With so many UK households tuning in to watch hit shows, such as "House of Cards" and "Orange is the New Black", research firm IHS has forecast that Netflix is on course to have around 7.5m subscribers in the UK by 2019.

Jonathan Broughton, senior analyst for TV and television media at IHS, told the Guardian that Netflix is "outspending everyone else currently on content and, if you take a global total excluding sport, that includes Sky".

He added that one of the reasons for Netlfix's success in the UK is because British viewers are attuned to "paying quite a lot for television" via providers like Sky.

"A low price point of £5.99 is extremely encouraging for them to take up an additional pay TV on the back of what they have," he said.

Good broadband penetration in the UK has also helped, he added, as well as the shared English language and that UK viewers have been "trained" in how to consume TV shows online because of the BBC's long-standing iPlayer service.

Other industry observers pointed to Netlflix's decision to invest heavily in original programming – for example, the company is reported to be spending £100m on "The Crown", its first original UK drama – and its "tentpole" marketing strategy of basing its promotional activity around big shows.

"Nothing is as powerful as a big hit and they've had a string of shows which got people talking," said Ben Preston, the editor of the Radio Times.

Indeed, such is Netlflix's focus on content that investment bank UBS expects the company to spend €360m (£283m) on UK content this year, rising to €409m each year over the next four years.

"Based on our forecasts we expect Netflix will spend more on content globally than the top seven commercial broadcasters in Europe by 2018-19," noted Richard Eary, head of European media equity research at UBS.

Data sourced from Guardian, BARB; additional content by Warc staff

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