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The streaming service is second only to Sky-owner Comcast, according to figures from Ampere Analysis
With much of the world restricted to their homes for the majority of 2020, it should come as no surprise that video streaming service Netflix has grown substantially in the past year. Now, according to stats from Ampere Analysis, it has reached a new milestone, becoming the second largest TV group in Europe in terms of 2020 revenue, second only to Comcast.
“Since launching in 2012, Netflix has grown rapidly in Europe. By 2016, it had launched its services across the whole of Europe and passed the $1 billion revenue milestone. By 2017, it had the largest customer tally of any subscription TV business in Europe. And by 2020, it reached another milestone. Last year, Netflix had become the second largest entity in Europe in terms of revenues, behind only Comcast (which owns Sky’s operations in Europe), and overtaking the German public broadcaster ARD,” said Ampere principal analyst Tony Maroulis. “It would seem that there is no limit to Netflix’s meteoric rise as it helps itself to a greater portion of the audio-visual revenues. In 2020, Netflix alone accounted for more than 6 per cent of all European TV revenues.”
Netflix’s success during the pandemic, however, is not indicative of the TV sector as a whole. In fact, while streaming services are blooming, the traditional TV market appears to be faltering, with advertising revenue in a stark decline.
As can be seen from Netflix steady growth in the 2010s, this shift towards streaming services is process which has been ongoing for some time. But, like digitalisation in so many industries, it is the coronavirus that has been the catalyst for rapid acceleration.
“More things have happened in streaming this past year than in the previous decade combined,” said Brian Fuhrer, SVP product strategy & thought leadership for Nielsen, speaking at CES.
Fuhrer noted that large amounts of the population being stuck inside during 2020 has resulted in a period of media experimentation, with wider adoption from older demographics that were previously the core audience of traditional TV.
"The early adoption phase is behind us. Older demographics, a mainstay of traditional TV, continue to embrace streaming. During the ‘stay at home’ period, a lot more people put the plumbing in to stream. It was a big period of enablement. People figured out how to get credentials and tried a lot of services. We think that is going to be the pivot for a lot of media consumption going forward as older demos increase and maintain their usage and sampling [of services]," he explained.
Furthermore, there is also the issue of pure scale. As the likes of Netflix and Amazon Prime continue to grow, their budget and production quality will reach levels unattainable by local broadcasters, potentially compounding their market lead.
How these broadcasters will overcome this major strategic hurdle remains to be seen but, with analysts suggesting that 2020 has been a significant shift in consumer mindset, recapturing market share from the streaming services will certainly be an uphill battle.
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