One projections has it Netflix will grow to 69 million U.S. subscribers by 2019, up from 43 million currently, according to ARK Investment Management. So projections are that Netflix subscribers will be spending some three hours and 20 minutes a day on the service.
In total, Netflix will deliver 83 billion hours of video viewed per year -- easily more than any network broadcast and cable (excluding sports). Nearest TV network groups will be NBCUniversal and Disney, which will only get to around 60 billion hours a year each.
Sounds incredible. Should TV networks be worried? Yes -- but not about those estimates. The biggest concern is if there are “cannibalistic” results -- that Netflix viewing is directly affecting the viewing on its own TV networks.
A few years ago, an analyst pointed to Viacom’s Nickelodeon as being affected by Netflix -- that deals with the big subscription-video-on demand service was hurting Nick’s traditional linear TV viewing.
But will the same be true for adult programming? Will Netflix deals for CBS, NBC, Fox, or ABC mean lower viewing for “Supergirl,” “The Blacklist,” “Empire,” and “Scandal”?
We all know these traditional TV networks are hedging their bets, offering up competing OTT platforms: CBS All Access, for example. Not to be left out, Viacom announced an OTT service for Nickelodeon about a year ago.
Traditional TV networks still tout access to producing premium TV shows as the reason for their continued strength -- but also find significant license fees from Netflix are decent business.
All of which gives them negotiating leverage against Netflix -- angling to keep some of this TV viewing closer to home, perhaps in new advertising-supported and subscription-fee video platforms.
And Netflix will have some leverage as well. The same report estimates Netflix will spend $5 billion on content in 2016 -- 50% more than in 2015. And that will grow by 22% per year over the next five years.
Netflix is no CBS, NBC, CBS, or Fox as yet when it comes to producing/greenlighting scores of TV shows. But if it get to a massive scale level in a few years, look for bigger TV disruptions.