The news of a net loss of subscribers has seen a dramatic chain of events that reek of desperation, not a company trying to recuperate an audience.
We once thought streaming services were set apart from free-to-air TV for two reasons: a mass choice of content anytime we want, and the lack of any advertisements.
Netflix was the perfect streamer to set the tone worldwide, with new services such as Stan and Binge (or the likes of HBO Max and Hulu in the U.S) quickly popping up and cashing in on the success.
Compared to the growing number of services, Netflix still stood out as the cream of the crop by having such a variety of great shows by different production companies and being the perfect place to binge anything, at any time.
Content soon became more sporadic between different services, an understandable result when networks keep their content to themselves.
The once giant Netflix had no choice in that matter, and it’s what prompted them to produce their own ‘Originals’ content.
But last month, things took a sour turn.
In its first quarter earnings report, Netflix revealed it had lost more than 200,000 subscribers globally in the first quarter of 2022.
This was a far cry from the 2.7 million additional subscribers originally expected.
It also posted a further loss of $50 billion in market capitalisation as shares in the company plunged by 35%, the biggest loss for the streamer to date.
Now, Netflix predicts it will lose a further two million subscribers in this current quarter – ouch! How much further can you go!
In response to the loss, Netflix has fast-tracked the introduction of an ad-supported subscriber option, with the system expected to be implemented in 2022.
According to The New York Times, Netflix has told employees that a cheaper, ad-supported tier will arrive in the final three months of this year.
As well as this, the streamer is set to be the first in the world to crackdown on password sharing, where one account holder shares the login details with friends or family, so only one in up to five people using a sole account will actually pay for the service.
Instead, a fee will apply for up to two ‘sub accounts’. Trials have already begun in Peru, Costa Rica and Chile.
And we get it Netflix, you need to make money. You’re at a monumental loss and now’s the time to recuperate… but is this really the way you’ll get your audience back?
On paper, it makes sense, force account holders to boot the freeloaders because Netflix will cost too much otherwise. Then the freeloaders, now without their poor old Netflix, will sign up with their own subscription – which could be at a cheaper rate if they settle with ads.
If not, they’ll subscribe to the more expensive no-ads options, BONUS!
The problem though is that Netflix no longer has the content to draw in an audience. We’ve circled back to that first thing we thought made Netflix stand out compared to free-to-air TV.
Now, other streamers have what people wanna watch and Netflix doesn’t have the full library we once expected and became accustomed to.
To be fair, Netflix does have some great content. Stranger Things, You, Bridgerton, Ozark, Squid Game, The Circle, there’s plenty to love on the red-and-black. But for every one great hit there’s a good handful of stinkers the streamer has somehow churned out with little faith and little production. Or, they’ll just cancel anything that’s half decent before it gets a chance to find its feet!
The streamer quickly took a quantity over quality approach, and the short-term gains are beginning to post long-term failures – Netflix’s entire reputation is having an extensive library with little to be excited about.
Just type ‘Netflix’ and ‘sh*t’ on Reddit and you’ll find an abundance of questions ranging from, “Why are Netflix movies so sh*t?” to “Is it just me or is 99% of Netflix sh*t?” or even just simply, “Netflix is sh*t”.
Netflix has long put its priorities in the wrong place, we’re only just seeing the ramifications of it now.
The quick fix of password crackdowns and ad-tier subscriptions are just that, a quick fix. There’s no use implementing these measures if you haven’t got the content to back it up when people subscribe.
It’s time Netflix recognises where it went wrong, address the failures, and stop blaming other streaming services for the loss in shares and subscribers.
Refocusing its strategy to be the place to access great content, instead of all the content, is exactly the direction Netflix needs to take.
It isn’t the giant it once was, customers have accepted that. It’s time Netflix gets on board too.
With proper investment in the right shows and films, and putting to rest the nearly daily grind of new releases, Netflix could win over the respect it used to deserve.
A downward spiral that screams of money-making schemes where subscribers are less than impressed with what’s on offer spells disaster. And I don’t think many will be willing to give Netflix a second chance.
Squeeze some more dollars out of us, go for it. But it won’t be long before those record-breaking losses are beaten to a point that’s impossible to return from.
Great insight!
Well written and hopefully Netflix will read it and think of what they need to do