Netflix’s Streaming Dominance Strengthens

Investing.com — Netflix (NASDAQ:NFLX)'s dominant position in the streaming landscape continues to strengthen, as revealed by Raymond James in its 16th Semi-Annual Media Usage Survey.

Key Findings from the December 2024 Survey

A key finding from the December 2024 survey indicates that Netflix’s penetration climbed to 56% from 50% in June 2024, reversing six consecutive declines. The service also ranks as the "most valued" among respondents, with 51% indicating Netflix would be one of the three services they’d keep if forced to choose. This figure significantly outpaces Amazon (NASDAQ:AMZN) Prime at 37% and Hulu at 25%.

Growing Interest in the Ad-Supported Tier

Netflix’s ad-supported tier is gaining traction, with approximately 68% of Netflix users reporting utilization of the ad tier, up from 52% in June 2024. An additional 11% expressed potential interest in adopting it. The combined figure of 79% marks a 12-point increase year-over-year, emphasizing the growing interest in cost-effective subscription options.

“Notably, the majority of incremental ad tier users switched from another Netflix plan rather than signing on from another service or external interest,” the report notes.

“Netflix has observed an ARPU (average revenue per unit) lift from Ads users compared to Basic subscription users, though Ads users are slightly ARPU-dilutive compared to Standard subscribers.”

Consumer Engagement and Demographic Insights

According to Raymond James, consumer engagement with Netflix remains robust across demographics. Usage among viewers aged 18-29 rose five points to 57%, while older users saw a 13-point increase to the same level.

Challenges for Other Streaming Platforms

The survey also highlights challenges for other streaming platforms. Max, Peacock, and Paramount+ experienced declines, with Peacock dropping the most to 11% from 15%, despite strong Olympic viewership. All three services remain in the low double digits to mid-teens, trailing significantly behind Netflix (51%), Amazon Prime (37%), and Disney’s offerings (mid-20s). This raises questions about the market's capacity to sustain numerous services.

“We believe consolidation among these three services is likely, particularly a combination of Paramount+ and Peacock given the incoming new leadership at Paramount, the companies’ existing streaming partnership overseas, and Comcast's (NASDAQ:CMCSA) expressed interest in such a partnership within Paramount’s S-4,” the report observes.

Broader Market Trends

Meanwhile, broader market trends are improving, the report reveals, with viewership hours on the rise. Specifically, 75% of respondents reported watching two or more hours of video daily, compared to 70% in June 2024.