Streaming video company Netflix, Inc. (NFLX), which reported stellar results earlier this week, will have 128 million viewers in the U.S. in 2017, an increase of 6.6% from 2016 numbers, according to research firm eMarketer. Viewers are non-paying subscribers (such as individuals who become members during Netflix's one-month trial period) of the service. eMarketer assumed 2.5 viewers for every member in its calculations. This means that the service would roughly have 51.2 million members by the end of 2017. In its most recent quarter, Netflix said it had 47.9 million paying members in the U.S. (See also: Netflix Stock Soars in After-Hours Beat.)
Given the service's stratospheric domestic growth numbers in recent years, that membership increase number may seem underwhelming. However, eMarketer said the service would see increased consumer engagement in the U.S. Martin Utreras, vice president of forecasting at eMarketer, listed a number of platforms that would drive increased consumer engagement in the U.S., including successful investment in original programming, availability of the service through multiple platforms and increased consumer time spend with digital video. (See also: Netflix: The Most Recent Example of Gap & Go.)
The company itself made note of this last point in its investor letter. "It's becoming an Internet TV world, which presents both challenges and opportunities for Netflix as we strive to earn screen time," it stated. Netflix has inked partnerships with Comcast Corporation (CMCSA) and Liberty Global Plc. (LBTYK) to expand its reach and viewership domestically and abroad. (See also: Why Netflix, Comcast Went From Enemies to Friends.)
In its post, eMarketer also made note of Netflix's decision to boost spending on original content. The Los Gatos, Calif.-based service has committed to spending $6 billion on 1,000 hours of original content this year. "As Netflix pursues this strategy, it will face growing competition not only from other full-episode players like Hulu and Amazon, but also from YouTube and Facebook, both of which have signaled their intentions to go deeper on long-form premium content," an analyst at the firm stated.
Indeed, Amazon.com, Inc. (AMZN) is turning out to be a formidable competitor to Netflix and has been going head-to-head with the service during awards season. Apple Inc. (AAPL) has also announced its intentions to produce original content recently. Unlike Netflix, however, these companies have deep reserves of cash and sizeable businesses to absorb losses as they expand their platform reach with original content. (See also: Apple Is Pursuing the Holy Grail of Original Content.)