That’s the takeaway from two new reports out this past week, the first of which comes from Parrot Analytics, a startup that measures audience interest in online TV shows. According to Parrot, Netflix accounted for about half of the original series people around the world wanted to watch online in the first quarter of 2021. Relates to Netflix Is Losing Market Share. But Is It Losing Customers? While Netflix is still far and away the dominant player, its market share is in decline. Two years ago, Netflix accounted for 64.6% of demand. The decline is even steeper in the U.S., where Netflix accounted for 48.1% of demand, the first time it’s ever been below 50%. (This may have something to do with Netflix’s more limited output in the first quarter of the year, though that doesn’t explain the two-year trend.) A report from Ampere Analysis painted a similar picture. Netflix’s share of subscribers in the U.S. has dropped 31% in one year. You could read these two reports and become convinced that the jig is up. Netflix’s long awaited funeral is finally here. Legacy media beat back the disruptor, and we can all go back to worshipping the House of Mouse. But is that what these numbers mean? Despite concerns that Netflix would be the next great technology monopoly, Netflix was never going to be the only online video network people used. Google – our one true king – can dominate search because it has access to all the relevant information it needs. It creates a better and better product by using all your searches to make its results better and better. Netflix was never going to have access to every single TV show or movie. In fact, its access to catalogs shrank as it shifted from being a tech company that distributed other people shows to an entertainment company that makes its own. And now that it’s an entertainment company, it really can’t be a monopoly. No company can monopolize creativity, not even Disney. The data from Parrot and Ampere reflects that Netflix, once one of just a couple players in its market, is now competing for attention with Disney+, HBO Max, Peacock, Apple TV+, Paramount+, Discovery+, as well as Amazon and Hulu. More people than ever are watching video online, and Netflix isn’t the only place they are watching. Here is a list of the most in-demand shows during the first quarter. Netflix accounts for 7 of the 10, but Disney+ and Amazon have entries as well. (And Disney+ has the two biggest.) relates to Netflix Is Losing Market Share. But Is It Losing Customers? The real question, which none of this data really answers, is whether this loss of share means interest in Netflix is sagging. We know people are watching less live TV, and leaving cable and satellite packages. We know people are watching more video online. But as people leave cable and satellite for streaming, are they just watching video online in more places, or are they watching less Netflix? If they are watching less Netflix, they are more likely to cancel. That would be bad for Netflix. The company has pushed back on this narrative, noting in recent quarters that its average user is spending more time on Netflix. The good news is we leave the realm of speculation in a couple days. The company reports earnings Tuesday. -- Lucas Shaw | 
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