Netflix has in a short time gone from one of those companies revered as disruptive for changing a business model as important as television and audiovisual distribution to now it seems like everyone wants to make firewood from a fallen tree.
The company started 2022 with strength, but in a direction not to be followed. In the first quarter, the streaming giant reported a loss of 200,000 subscribers, the first loss of subscribers in more than 10 years. In addition, Netflix expects lose another 2 million subscribers more in the second quarter of 2022, data to be confirmed or not soon.
The truth is that ever since Netflix announced its first drop in worldwide subscribers just over a month ago, and the backlash hasn’t stopped.. Largely due to the nervousness of investors, whose shares have fallen by almost 70% this year.
But before we continue to dig into its wounds, let’s get one thing clear: Netflix is still the industry leader. With a weak situation due to its way of keeping accounts and content, reinvestment of all its income, but growing health in developing countries. Let’s continue with this caveat.
AS WELL ASThe latest rejection Netflix has given since the bad news for Red Giant began had to confirm that there would be a cheap subscription with ads. Price and date are yet to be announced, but Ted Sarandos, co-CEO, made it clear this week.
The announcement followed another piece of bad news. According to a report from Information, more and more longtime Netflix subscribers are unsubscribing. A clear sign that competition, new people in the room, draws more attention. Survey data consulted by the publication shows that subscribers using the service for more than three years accounted for 13% of cancellations in the first quarter of 2022.
Since the number of cancellations has generally increased, Information reports that new users represent a smaller part of them, another indication that Netflix is struggling to retain users for longer periods. In the second quarter of 2021, surveyed people who subscribed to the platform for less than a year accounted for 70% of the cancellations, while regular subscribers accounted for six percent. 60% of cancellations were made by new subscribers in the last quarter.
Password sharing locks didn’t go well
Another response he took to stop the bleeding was an anti-sharing test, charging an additional $2/3 at the exchange rate in Chile, Costa Rica, and Peru.
The test didn’t go well. BUTApparently, the notification that the application was sent to account holders served as a reminder in some cases they paid and did not get much pleasure from it, which led to great sacrifices.
A survey conducted by Time2Play in Spain left a similar impression of how much current users are willing to pay more to keep sharing their passwords.
Only 54% of the Spaniards surveyed use someone else’s Netflix. Of this amount, 84% said they would not pay for their own subscription if Netflix banned account sharing.. So now that the company has announced that it will be charging for multiple profiles, it could be facing the loss of even more users, at least in Spain.
In fact, many people who now have their own account and share it with someone else may opt out if they need to stop sharing costs.
Of the 46% who pay for their own subscription, 67% share an account with friends or family, according to the survey. We might think they are still doing it to get something in return, but it turns out they are doing it out of sheer generosity: only 30% ask for a favor back by giving them access to another streaming service.
Average, in Spain, 2.9 people use a Netflix account.which is on average higher than in other countries where we conducted a similar study: 2.3 in the US and 2.7 in Italy.
Opportunities other than advertising: sports betting or change of premier model
Now given that these direction changes don’t seem to work at the moment, What options could Netflix take in the medium term?
The first option might be to abandon the current full series ordering policy. back to the pilot model. This is something that seems to have already been raised inside at the time. “If you’re a typical studio, you get paid for the pilot, and if it’s successful, you pick up the show, maybe shoot a few more episodes, and wait for the ratings,” said Netflix’s Barry Enderwick. marketing department from 2001 to 2012 and who was director of global marketing and subscriber acquisition, told CNBC in 2018.
“At Netflix, our data made the decisions for us, so we only asked for two seasons. The show’s creators asked us, “Do you want to see the notes? Don’t you want to see the pilot episode?” And we said, “If you want us to do it.” The creators were speechless.”
Ordering projects straight from the series gave writers and producers the security andoften more money. The downside, according to Netflix, is that it also spawned series that didn’t turn out to be very good.
Due to this, another possible solution could be to end the prime minister policy followed by all episodes. something that, in part, has already begun to do with its “parts” in which you split for example money robbery or weird things.
“There is no reason to release it weekly,” co-CEO Ted Sarandos said in 2016.. “The move away from planned television is huge. So why are you going to bring people back to something they are giving up in large numbers?”
However, in recent years, Netflix has experimented with weekly releases of some reality shows instead of mass releases. So far this has not been extended to streaming scenarios.
Sports Live: The New Frontier of Streaming
As Amazon Prime Video and Apple TV+ have already acquired US sports broadcasting rights, it’s clear that sports is another important area that needs attention.
Netflix has long refused to participate in sports betting, a staple of traditional media companies. However, Hastings said last year that Netflix would consider bidding for the rights to Formula 1 lives to match them with the success of their documentary series Drive to survivewhich profiles every racing season.
“A few years ago, the rights to Formula 1 were sold”Hastings told a German magazine Der Spiegel in September. “At that time we were not among the bidders, today we would think about it.”
The addition of live sports could give Netflix a new audience, but it belies Netflix’s recent reluctance to spend a lot of money on highly licensed programming.
We will see what the Netflix of the future is like, a player that, despite the onslaught of competitors, it should be remembered once again that it is still the leader in terms of the number of users.
Source: Hiper Textual
