Last month, Netflix hit the headlines once again by announcing that it had attracted more than 65 million members globally, with over 42 million of these subscribers coming from the US.
The continuing expansion of the service is very much in line with how digital consumption behaviours have been changing in recent years. Our data shows that the typical internet user is now watching online TV for an average of 0.74 hours per day, up from 0.58 hours in 2012. Linear TV certainly hasn't been abandoned - it's still by far the most dominant form of media, accounting for an average of just over 2.5 hours per day - but two trends are particularly telling here. Firstly, time spent on linear TV increases in line with age, from about 2 hours for 16-24s to just under 3.25 hours for 55-64s. Secondly, the key 16-34 demographic is the only one in which daily time spent on online TV passes the 1 hour mark. It's also the only one where time devoted to linear TV has declined since 2012. Certainly, the year-on-year drops are very small, but all this offers clear evidence that it's the youngest consumers who are leading the charge towards online TV and whose consumption patterns are being impacted the most by the growth of Netflix and other OTT services.
While Netflix has been very keen to announce each new membership milestone, it has been rather more reticent to publicise any numbers relating to account sharing (those instances where multiple people use the same login/password). Although some level of sharing has to be expected on any service of this type, our data shows that it's a major trend on Netflix. Across the USA and UK - two of the most important markets for Netflix - just 35% of members in fact say that they are the only user of their account. That means the other two thirds are sharers, with a fifth reporting that their Netflix account is used by at least three other people. Women and 16-24s are the groups most likely to be doing this, but that the sharing figure exceeds 50% in all of the major demographic segments is arguably the most important point here.
Of course, Netflix makes some provision for account sharing via its 'family plan', which allows users to have four simultaneous streams. But if we analyse the demographics of those who say they pay for their Netflix membership, it's clear that not all of these sharers are from the same family or household. In the UK and USA, for example, it's 69% of Netflixers who say they are the payer; a further 10% are on a free trial, meaning it's the remaining 21% who say they use an account paid for by somebody else who are of real interest here. Look at this group in isolation and just over two thirds of them are living with their parents or partner - putting them firmly in the 'family plan' territory. Yet a further 12% of these individuals are living with friends and - most interestingly of all - 15% are living by themselves. It's here that we're seeing much less official forms of account sharing taking place, with users pooling their resources in order to cut costs.
In some quarters, sharing behaviours of this type will be triggering alarm bells. But actually, there's much good news here for Netflix. If we take the number of official subscribers it reported last month and then add in additional users who are accessing the service via shared accounts, Netflix's total audience size in the UK and USA is 2.2x bigger than the number of official subscribers would be able to show. In the US, then, Netflix might report 42 million subscribers but its number of viewers is actually around the 100 million mark. As a result, its reach is substantially increased and Netflix can present itself as a much bigger force (and a much stronger competitor for linear TV) than previously recognised.
What's particularly noteworthy here is that, across other digital behaviors such as mobile and tablet internet usage, sharing behaviors tend to be much more pronounced in fast-growth rather than mature countries. When it comes to tablets, for example, half share their device in the US but three quarters are doing this in a place like Argentina. By extension, that means that Netflix account sharing is likely to be even more common in the service's Latin American markets than it is in its North American territories, and with APAC also on Netflix's radar for future expansion, we have to anticipate that levels of account sharing will increase still further in the future.
Although the number of paying subscribers is always going to be the most important - and publicised - metric for Netflix, these trends make it clear that we need to stop looking at subscribers as a proxy for user numbers. In reality, there are already tens of millions of additional Netflixers who are being hidden from estimates of this type and this number will only get bigger as Netflix continues its global expansion plans.