Is Netflix’s funeral approaching?
Have you ever sat comfortably on your sofa on a rainy weekend, grabbed a hot buttery popcorn bucket, and turned on your TV to watch a heart-warming movie? Have you ever stopped everything you were doing just to watch the launch of the new episode of your favorite series? If you enjoy series and movies you are likely to have a subscription to Netflix, responsible for much of this joy and excitement in more than 200 millions of lives.
Netflix is an American company created in 1997 by two friends, Reed Hastings and Marc Randolph, in Los Gatos, California. They started the company as a DVD rental firm, but after some time in the market, they realized a new business model would be better since they had begun offering the subscribers the option to stream some of its movies directly to their homes through the Internet. This new model was what is known today as the streaming technology.
In this business, people subscribe to one of the plans (basic, standard or premium) to access a library of various movies and TV series. For the basic plan, for example, they pay in the United States $8.99 dollars every month to watch one screen and have downloads on one tablet or phone. The plan you choose will determine the video quality and the number of screens you can watch Netflix on at the same time.
Netflix produces its own programs and movies, offering “Netflix Original” content. Netflix released an estimated 2,769 hours of original series, TV shows, movies and other productions in 2019, according to Statista (https://www.statista.com/statistics/882490/netflix-original-content-hours/). In the catalogue, there are many famous series available, such as Anne with an E, Stranger Things, La Casa de Papel, Grey’s Anatomy, The Umbrella Academy, A Series of Unfortunate Events and many others.
The company currently has over 209 million subscribers all around the world. Most countries have Netflix, except for China, Crimea, North Korea and Syria, due to ongoing internal conflicts and government censorship over international influences. In spite of these exceptions, Netflix is a very popular company that changed the way we watch TV.
Netflix has long been the dominant player in the streaming and entertainment market, but, last year, its main competitors - Amazon Prime, Disney +, HBO Max, and Hulu - gained a significant number of customers. The main reason for this shift is that people are getting frustrated because Netflix is canceling a lot of shows. Mostly because of COVID-19, the platform had to cut costs, which led to the canceling of some beloved series and movies. If some Netflix fans are growing increasingly disillusioned that their favorite shows are constantly being cancelled, why would they continue to support a streaming platform that does so?
The fact is that Netflix is losing market share globally. Although it is still the biggest player in the industry, the company’s share has dropped 15% worldwide, from 65% to 50%, and 31% in the US in one year.
The question is whether this drop in market share means Netflix is sagging. We know people are leaving cable and satellite TV, but are they also watching less Netflix and preferring other streaming services? The company’s management states that there is a strong outlook for the future, since the firm is normalizing its content levels and is constantly looking for ways to improve. According to them, they will continue to create new content to attract new customers and keep their pole position. Indeed, they promise 2022 is going to be one of the best years of all time for Netflix, with new seasons of Cobra Kai, Witcher, You, Cowboy Bebop, Locke and Key, Money Heist as well as new episodes of some of the most beloved series, like Stranger Things, The Crown and Ozark.
No one can deny that Netflix has had amazing success. Its impact is so big that the company’s name is becoming part of the English grammar, as both a noun and a verb, as “netflixing” now means, by common sense, “the act of watching an entire season of a show in one sitting”, and the expression “Netflix and chill” also has its novel definition among the younger generation.
Netflix is an amazing company that has a lot of power in the market. However, competitors have an appetite and are coming at full speed. The streaming market is not for amateurs and requires significant investments. Besides, inventions nowadays are created almost every minute, forcing players to adapt fast and keep an eye in the future. One of the things future technologies may bring is the ability to watch movies on different screens, not those of computers, TVs, cell phones or IPADs, but flexible displays with shape-shifting materials, 3D holograms or even virtual projections on surfaces (on your dining table, kitchen walls, anywhere you desire). The future has many surprises in storage for us, like the possibility of watching Stranger Things on your own arm! Will Netflix be part of these upcoming events or is it time to give it a farewell? Should Netflix revise its strategy of massive content investments and costly marketing campaigns, we see a strong possibility it will have a future with a sustainable growth, otherwise it is dangerously building a house of cards.
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