The good news is, Netflix (NASDAQ:NFLX) is still the undisputed king of streaming. The bad news is, its slowing growth may soon come to an outright halt.

That's the gist of a recent survey performed by Whip Media Group, anyway, which found that the average U.S. consumer only plans to add one more on-demand service to their already-unwieldy number of streaming subscriptions. Their chief complaint? These services are getting expensive.

Person holding an umbrella up against a storm wind.

Image source: Getty Images.

It's not a death knell for Netflix. Indeed, Netflix remains the world's most popular on-demand video platform; it's also the one most likely to be kept if the survey's respondents could only keep one streaming service. However, it should be a worry for current owners of Netflix shares, as this stock has historically been priced at a premium based on growth that's no longer in the cards.

Maxed out

It's a day most investors knew would arrive sooner or later. That is, at least in the U.S., Netflix is running out of households to which it can sell its services. The rest of the world isn't yet fully tapped, but as is the case within the U.S., overseas streaming video-on-demand markets are also apt to get pretty crowded shortly.

Whip Media's numbers tell the tale. Chief among these numbers is how the average U.S. household currently subscribes to 4.7 streaming services, and there's a good chance that Netflix is already one of them. The company reported 74 million paid U.S. and Canadian memberships as of the end of the second quarter of this year, or roughly half the two countries' aggregate household count. Tivo's Q2 video trends report confirms that more than 80% of U.S. and Canadian broadband and streaming consumers subscribe to Netflix, easily making it the most popular piece of these SVOD subscription mixes.

Being the biggest and most popular provider in a particular business, however, is a double-edged sword when that business as a whole is about to hit a big wall like this one. The aforementioned North American consumers? They also say they're only going to add one more streaming service to their lineup. That leaves little growth opportunity for newer services like Walt Disney's Disney+ and AT&T's HBO Max. But, it leaves even less growth opportunity on the table for Netflix, which is likely already being paid for by most of the prospective streaming market.

To this end, Netflix actually lost about 400,000 paying North American subscribers during the second quarter of this year following tepid growth every quarter from last year's third quarter on; things weren't much better in other markets.

Netflix's subscribers growth is slowing in all markets, and shrinking in North America.

Data source: Netflix. Chart by author.

Enough already!

Sure, the pandemic-driven subscriber surge is certainly a tough act to follow. It stands to reason, however, the lockdowns only accelerated the complete conversion of any prospective Netflix subscribers to full-blown paying members.

In simpler terms, if somebody in North America was ever going to become a Netflix customer, they've probably already done so.

Bolstering this headwind -- in addition to consumers' typical plan to only add one more streaming service to their current 4.7 services -- is the fact that Netflix now faces a massive amount of new competition. HBO Max and Comcast's Peacock have only materialized since the middle of last year, joining Disney's Hulu, a new-and-improved CBS All Access now called Paramount+ from ViacomCBS, and Amazon Prime, which spent 40% more on original content in 2020 than it did in 2019. Even 70% of the respondents to Whip Media's survey said there are now too many SVOD services now available. A lack of choice isn't keeping would-be streaming customers on the sidelines.

None of these names will dethrone Netflix anytime soon on their own. Collectively though, they're making waves for Netflix at a time when the company is facing the stand-alone problem of market saturation.

The kicker: Whip's survey also indicates that while subscribers are still highly satisfied with Netflix, they're a little bit happier with newcomer HBO Max. Forty-one percent of survey respondents picked Netflix as the service they'd keep if they could only have one. Twenty-one percent, about half, said they'd stick with HBO Max. But remember, there are about twice as many North American Netflix members as there are HBO Max subscribers. The two services are similarly sticky once customers are brought on board, further pointing to Netflix loosening its hold on the market.

It's about valuation nowadays, and not the growth story

Again, Netflix will survive. It will actually be just fine even if subscriber and revenue growth slows to a crawl, as the same saturation dynamic evident in North America eventually takes shape in other parts of the world. If nothing else, it's profitable and can remain so for the indefinite future.

The concern, rather, is about the stock. This name has historically been priced at rich valuations based on its growth pace and market dominance.

It still is, in fact. Even after several quarters of lackluster membership and revenue growth, the market's still supporting a trailing price-to-earnings ratio of around 60 and a forward-looking one near 45. Of course, these are lofty valuations that rely on support from impressive growth metrics. But investors have never really had to value Netflix shares in an environment as challenging as the one it's in now, nor the even more difficult one that lies ahead.

Bottom line? Brace for Netflix's recent anemic growth to become the new norm. My analysis shows the average consumer is nearing the point of being "maxed out" on streaming services -- if they're not there already.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis -- even one of our own -- helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.