In the first quarter of 2022, the company lost subscribers for the first time in over a decade, while predicting that it would lose 2 million more by June. Wall Street was screaming. According to CNBC, the brand lost $50 billion in value due to the stock plunge.
What is to blame for the exodus from the service? Everyone has an opinion, from ballooning subscription costs to weak programming, the bursting of the Pandemic bubble that kept people at home, or the "woke mind virus", as one supposed genius suggested.
Most of the theories have at least some merit, despite the idiotic hot take from the would-be owner. Carmi Levy, a technology analyst, has seen the writing on the wall for a long time.
During the company's salad days of double-digit subscriber growth, it ignored creeping structural problems like credential reuse, dissatisfaction with release schedules, licensing limitations in certain countries, among others.
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It allowed itself to be lulled into a false sense of security as it masked the underlying challenges facing the company. It must now scramble to respond to the inevitable change in fortune because it mistakenly failed to address these issues.
I used to work in book publishing, where most books made little or no money and barely earned back their author advances. Publishers don't care about these books because they're desperately searching for the next Harry Potter, that will bankroll their business for years. Publishers write new authors off after three books and invest in the next golden goose when books don't explode in sales.
I bring this up because it's the same thing with the streaming library. Every week, it throws a new series at the wall, hoping that it will become the next Squid Game.
If a show doesn't get a lot of attention, it will be canceled by the company within a week.
If a show is a hit, it will get a second or third season, but at that point, even popularity won't save it, because production costs and actor salaries will go up.
Why get invested in any Netflix show if you know it'll last two seasons at most?
Levy says that by failing to allow successful content to breathe and grow and dig deeper roots among viewers, it is increasingly vulnerable to Churn as subscribers try to connect with trusted content over the long term.
If you know that the show will last 10-30 episodes, you should not invest in it.
When House of Cards and Orange Is the New Black were on DVD, people came to watch them, but they stayed to watch The Office and Friends. It helped increase the number of subscribers to 220 million.
The formula doesn't work now. People have a lot of other streaming options from networks, most of which are using their own syndicated content, while keeping things fresh with weekly appointment television. That left the streaming service reliant on flash-in-the-pan shows.
When people talk about the best shows, the first question is either "What episode are you on?" or "Did you finish?" because the app throws every episode at you at once. People move on after no one mentions it out of fear. It's not an organic way to build a fan base.
Anecdotally, I sure don't have the time or bandwidth to sit down and binge a season of television every week or two. An hour or two per show a week is perfect. And if I did, I wouldn't remember the same amount of details when it came time for water-cooler buzz. "That was good ya"April 21, 2022
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Levy pointed out that an all-in-one release garners headlines and engagement as viewers rush to binge-watch the latest and greatest. It's more difficult for subscribers to create regular engagement schedules that are tied to the platform over time if they're lying too heavily on these types of releases.
It has made more of an impression on people with the fact that they can watch and discuss the movie quickly. Even a mediocre show doesn't capture people's attention for long.
Levy says thatNetflix will need to experiment with a more diverse mix of release strategies to ensure it appeals to a wider swath of consumers.
I am curious how many people pay for more than one service at a time. In my personal bubble, different family members and friends pay for different things. Most families or friends have their own arrangements.
If you add up the total cost for everything, you end up paying for a cable package, which is what streaming was meant to replace. It is why the video streaming industry is built on password sharing.
It allows people to pay what they can afford without missing out on a show. The subscribers rely on others to pay for the cheaper services, so it lets them subsidize the higher fees. It ensures that people will not cancel their account even if they are bored with the service.
Password sharing costs the global streaming industry $25 billion a year, according to Fortune, but it is leadership inertia that is costing it.
The execs or their shareholders want to claim that revenue has been lost. Waiting until now to solve the problem, instead of offsetting losses during major growth periods years ago was short-sighted.
The streaming system could collapse because no one wants to pay for every streaming app themselves, if companies start restricting accounts. If it is the one service people keep while abandoning the rest, then that is not a problem for Netflix.
Up to two extra users can be charged for a few bucks in countries like Chile and Peru. It would be less likely that the primary user would offer to share with friends in the future if this888-607-888-607-888-607-888-607-888-607-3166 would limit excessive sharing and888-607-888-607-888-607-888-607-888-607-888-607-888-607-888-607-888-607-888-607-888-607-888-607-888-607-888-607-888-607-888-607-888-607-888-607-3166 would limit excessive sharing and888-607-888-607-888-607-
It could be a less painful solution if it makes this system global. It will only cause a further exodus and loss of goodwill if they forbid people from watching it on vacation because of paranoia.
New subscribers could be claimed as kicked-off users. If people used to be willing to pay for a cheaper ad-backed subscription, then that will be the case.
People forced out of shared accounts will have a cheaper option to retain access, and new subscribers will see a lower cost of entry. Will it work?
Levy thinks that a cheap ad-supported tier could reduce the company's exclusive reliance on subscriber revenues, which could reduce the pressure to raise subscriber rates across the board.
It is a win for everyone. In practice, the streaming giant will have to sell the idea very carefully, as it is likely to be unpopular with long-time users, and given its current stock issues.
Mobile games are available for free to subscribers, and they have exclusives like a League of Legends spinoff. It takes years to develop a game, and by the time a game is finished, it might already have been canceled.
Play Pass and Apple Arcade are both mobile gaming platforms that offer a lot of games for a lot of money. It will take a lot of time and money to get access to games for its subscribers, and other companies offer it more easily.
That is the biggest problem for the company in a lot of ways. It made a huge splash as the first major streaming service, but it can't match the decades-long backlog of competing services like Peacock, Disney+, and Paramount+, or the ability to bundle its subscription with other products like Apple TV+ and Prime Video.
You can find a lot of other content to watch on your streaming device.
The only way to keep releasing original content is to release it in a frenzy. Most people can't possibly watch all of the releases. We don't want to watch anything except old favorites because we know they have satisfying endings. We decided to cancel our subscriptions. It is a predictable cycle, but I am not sure how to break it.
It would be naive to believe that the company will ever return to the days when it owned the streaming market and could rely on consistent growth to mask any underlying flaws within its business model.
It would be premature to assume that the company can pivot once more as the traditional, as he pointed out that the company&s DVD-to-streaming pivot is baked into the company's DNA.
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