Streaming is about time spent: Netflix and YouTube are dominating

Despite strong subscriber competition from established firms like Disney, new research suggests that Netflix and YouTube continue to dominate people’s attention with a 47% share of time spent watching, according to technology, media and telecommunications research firm Lightshed.

Why it matters

What’s interesting about LightShed’s new research is how Netflix and YouTube’s time spent is exceptionally strong even as new competitors from established TV giants, like Disney and subsidiary Hulu, have grown subscribers by around 50%. “The clear implication is that time spent per household subscriber fell meaningfully for both services,” says LightShed.

Of course, it’s not a totally fair comparison as YouTube is free to air, though it does reinforce its status as a good destination for ad dollars.

But the research firm suggests that both Alphabet’s streamer and Netflix have cracked the important aspects of streaming which is capturing more time spent through a wide breadth of content. Engagement is fundamental to a robust subscription service over the medium- to long-term. For Disney, high subscriptions with low engagement could spell very real problems when it must inevitably raise prices.

The research

• Based on a combination of Comscore figures and LightShed research estimates, the new study compares share of viewing hours between January of 2020 and June 2021. 
• It applies an extraordinarily wide definition to connected TV as the amount of subscriber time spent on a service via smart TV, streaming device, mobile, tablet, or PC.
• Netflix and YouTube continue to dominate with 26% share for Netflix with a subscriber increase of just 9%, and YouTube taking 21% of people’s viewing time.
• The core comparison is to Disney+ which despite 55% subscription growth in those 18 months has seen share of time decline from 5% to 4%.
• Hulu, which also saw strong subscriber growth at 41% has seen time share decline three percentage points to reach 13%.

The background

Netflix is in an extremely strong run of form with the barnstorming global success of improbable hit Squid Game, and with subscriber growth ahead of Wall Street forecasts in this week’s third quarter results.

But, as Netflix CEO Reed Hastings told investors, the company is aiming for a bigger prize:  “[A] company like Disney is still ahead of us in some of those dimensions of putting that whole experience together, but boy, are we making progress. And so exciting over the next three to five years, [to be] closing that gap and hope to pass them on that spectacular all-around experience.”

Sourced from LightShed, FT, Motley Fool. [Image: LightShed]