The days of Netflix reaping the benefits of cord cutting may be over

Netflix has squeezed just about all it can out of American TV viewers who cut the cable cord, according to a new report from analyst firm MoffettNathanson. The reason is simple: A lot of potential cord cutters already pay for the quintessential streaming service. There’s not a whole lot of fighting left to do in a war already won.

“Our research shows that most pay TV households already have Netflix so even if cord-cutting accelerates, Netflix won’t get a whole slew of new customers,” MoffettNathanson’s report predicts. “In [other] words, people are cutting the cord because they have Netflix. They don’t cut the cord and discover Netflix for the first time.”

By now, the specter of cord cutting is warm and familiar, but more change is still on the way after a record 2019: Comcast warned investors as recently as January that cord cutting is still accelerating. Likewise, an estimated 40% of current pay-TV subscribers are “at risk” of ditching cable or the like in the next five years, MoffettNathanson predicted in December. Cord cutting was Netflix’s wave to ride, but if that well has run dry, where should Netflix go digging next?

According to MoffettNathanson’s latest report, Netflix may gain the most from attempting to woo people who don’t pay to watch anything—cable or otherwise—either because of the cost or because they’re simply disinterested. However, with cheaper streaming services popping up and generating hype, plus plenty of ad-supported options such as YouTube available, Netflix may struggle to reach these people, MoffettNathanson argues.

For Netflix and its investors, the challenge makes international growth all the more urgent, as competing services such as Disney Plus prioritize the U.S. and make the case for squeezing yet another streaming bill into your budget.