The rising popularity of Netflix represents a two-pronged threat to the cable industry. On one hand, cable companies need to keep subscribers who pay upwards of $100/month happy enough to keep them from cutting the cord completely. Additionally, cable companies need to figure out ways to bring new subscribers into the fold.
On the first front, the cable industry is doing alright. While the cord cutting phenomenon is very real, its impact, at least not yet, isn’t as severe as initially believed. As we reported earlier in the week, the rate of cable subscribers cutting the cord has noticeably slowed down as of late.
On the second front, well, this is where the true challenge lies.
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According to a recent report from MoffettNathanson Research (via Exstreamist), 81% of adults between the ages of 18 and 35 have Netflix accounts, representing a 9% increase from just two years previous.
This data point, in conjunction with a previous report pointing to discernible increase in the number of young viewers who have never signed up for cable in the first place highlights that cable companies are having a tough time connecting with younger viewers who are apparently content with exclusively accessing media content via streaming.
Also interesting is that the research report found that 45 to 54 year-olds are the fastest growing demographic of users on Netflix. Indeed, subscriptions from that age group increased by 20% in the last two years alone.
Going forward, it will be interesting to see how Netflix plans to boost its bottom line. Sure, the company recently opened up to a multitude of new markets, but once Netflix has a subscriber in place, there’s not much it can do to extract more revenue save for raising the cost of the service. Fortunately for Netflix, that won’t be a problem they’ll encounter for some time.
