Netflix, the streaming behemoth, a platform that has established itself as the first and foremost standard-bearer of a service comprised of thousands of TV shows and films available for low-cost subscriptions, has recently begun to lose a few hits as a result of increased competition from similar services to his own.
It was natural for the company to see a downturn after ten years of sailing with the wind at their backs and seeing a steady increase in consumers, but a loss of this scale was impossible to forecast. Netflix, the streaming behemoth, a platform that has established itself as the first and foremost standard-bearer of a service comprised of thousands of TV shows and films available for low-cost subscriptions, has recently begun to lose a few hits as a result of increased competition from similar services to his own, such as Disney + and Amazon Prime Video, which have grown increasingly aggressive in recent years.
Of fact, the situation that exists now is virtually catastrophic in nature. The accounts are not doing well, and there are two hundred thousand fewer customers than there were at the end of 2021, causing the streaming powerhouse to fall to Wall Street. Stocks fell about 40% in what will be known as Netflix's "Black Wednesday," and the company's market valuation collapsed by $ 58 billion, according to the Wall Street Journal. The question that many people have is: "Is Netflix on its way out?"
Let's attempt to make things more clear. In the long run, it is inconceivable to imagine that the US streaming behemoth would suffer a complete and utter failure, despite the fact that the firm has cautioned its investors that the short-term outlook is not the most hopeful, with the company forecasting additional subscriber losses (up to 2 million in the next quarter). After all, Netflix has for many years played the role of the industry behemoth in the internet streaming sector, with little competition at the outset and only tiny rival services to worry about seeing its dominance in any way challenged. In terms of changing a sector, the use of on-demand services, it succeeded in making it appealing to many people on both a social and an economic level. However, a number of elements came into play after that.
More and more fierce competitors
Competing platforms have started to eat away at Netflix's content - think, for example, of the transfer of the whole Marvel universe to Disney+, which has amassed over 200 million paying subscribers in the span of a few years since its inception - and to create their own. What about Jeff Bezos' paw (which was obviously not the most recent addition) which purchased Metro Goldwyn Meyer with his Prima Video company? The obvious result is that users begin to look around, orienting themselves towards other platforms that may be more accommodating on the content front: imagine trying to keep five or six different subscriptions active, each weighing hundreds of dollars (or euros) per month, which would be impossible for many families to maintain. Netflix, as a major participant, is likely to become one of many, or at the very least a level supporting actor.
They did not hide behind a finger, but they did not miss an opportunity to stress how the suspension of Netflix service in Russia in response to the invasion of Ukraine, coupled with the slow drop in subscriber numbers, has had a major effect. "According to the California-based corporation, the suspension resulted in a net loss of 700 thousand memberships as a result. We would have gained 500 thousand additional consumers if this had not happened, as compared to the previous quarter "..... Even if the excuse is partial, it is no surprise that Netflix has been attempting for some time to discover strategies to enhance turnover while also restricting competition.
Countermeasures: advertising, video games, passwords
But what are the countermeasures that have been put in place? For the time being, there are merely sketches or semi-announcements. We will have to wait a while before seeing any outcomes (and we are talking about years). However, the most eye-catching step is also the most alarming, since it will result in a paradigm shift: the streaming behemoth has, in fact, made its services available for commercial use. Her long-standing opposition to 'intrusive' advertising has suddenly given way to consideration of the prospect of offering memberships at a discounted rate that include the insertion of commercial adverts. It is a watershed moment, a'reversal of course,' that, despite everything, has the potential to transform into a fortune. For the time being, as previously said, it is a straightforward opening that would only be expanded to lower-cost memberships. Currently available packages - which are still reasonably priced, but not at the levels of previous decades - would be preserved, and a new solution would be introduced to entice subscribers willing to put up with advertisements in exchange for a lower price. Is it a decrease in status? Even though it is just partial, it may be fruitful upon deeper examination, since purists of 'clean' contents would not be unsatisfied with the results.
The second card is the card of games, which is possibly the least intellectual of the bunch. Netflix has already had a section exclusively devoted to video games for some time, with some of the titles being inspired by the TV shows in the collection. Take, for example, the titles tied to the popular 'Stranger Things' series, which totaled two titles in total. To now, there are 17 games accessible to users, all of which are included in the price of the subscriptions. These games are available for both Android and iOS devices. The firm's collection of playable video games will continue to develop; in fact, it has been doing so for quite some time, although slowly; but, it seems that the corporation is fully committed to making significant investments in the field. Is this an obstinate move? It is impossible to imagine that video games, no matter how compelling, may have a positive impact on the development of users. What do you think Netflix's next step will be? With the use of on-demand entertainment, one may intercept a gaming audience and bring it to oneself. Active users should be given some kind of 'chocolate' in order to keep them from leaving. However, this does not seem to be a tactically astute move (although this is really my own view).
It has been discussed for some time now that the third step would be to put a stop to the practice of sharing passwords, which has become increasingly popular in recent years and allows you to borrow the accesses of friends or family members in order to use the subscription service referred to as 'latch.' According to Netflix, more than 100 million households across the globe are utilizing a shared password, resulting in a dramatic drop in the number of users and, more importantly, the number of paid memberships. Increased effectiveness of the access system, as well as sub-subscriptions (similar to a lease) that enable the password to be shared with a certain number of people, would be the answer... However, there do not seem to be any concrete plans on this front, and we will have to wait and see what Netflix decides to do.
Whether or whether Netflix's efforts are effective in maintaining its streaming advantage and keeping the competitors at bay remains to be seen. It is difficult to predict the future without a crystal ball. There are, nevertheless, certain guarantees: Although Netflix's membership charges have increased, the service continues to provide hundreds of hours of outstanding material at very inexpensive pricing. Rivals have attained such a level of prominence that they may legitimately be referred to as competitors. Although the Californian behemoth will have to continue to examine if it is feasible to separate itself - maybe in other ways - from its rivals, the company will have to get accustomed to the fact that it will most likely be just one of many players in the field.
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