Netflix lost 200,000 subscribers in the first quarter of 2022, and they say password sharing is the main reason. Um, they also lost the rights to a lot of shows, including Star Trek and, I believe, Avatar: The Last Airbender, which both went to Paramount Plus.
Are they in trouble, or are they too big to fail? And is a slowdown a good thing? I think so. The Balkanization of streaming services is absolutely out of control. I have five or six.
They are having trouble, it doesn’t have to be fatal. There will be a streaming service shake-up and Netflix is still in a good position to acquire other channels that fail. One of their problems is a lack of flix. Plenty of TV shows and series but other services are getting a lock on big popular movies.
Paying for password sharing isn’t going return them a lot of income long term. The stock may be down for a while.
I went from being a long term subscriber of Netflix to someone that drops it for 5 to 7 months a year. I’m about to subscribe again as Stranger Things comes out in May.
They need to stop raising their prices as fast as they do or more and more people will do as I do.
They’re considering a plan with commercials I’ve read. They’re cutting part of their animation budget apparently. They’re talking about cracking down on account sharing.
So I don’t think they’re doomed, but maybe they have topped out without getting creative with plans.
I’m in the middle of having a conversation with my mother as to whether or not we really use Netflix. She’s going to consult her Google Spreadsheet and get back to me on that.
Netflix spends lavishly on new productions; supposedly 10.8 billion in 2020, and about 13.5 billion in 2021. They gave big contracts (on the order of several hundred million) to producers/showrunners like Shonda Rhimes or Ryan Murphy. So there’s a lot of room for belt-tightening. For one thing, rather than spending big for the Ryan Murphys of the world, hire unknowns with good ideas.
All their plans feel like all stick and no carrot to make people want to come back or stay with them. Even the “ad-supported” tier doesn’t sound enticing – who likes ads? If they’re selling you 2-4 screens worth of Netflix at a time and you only need one, now you’re being “cracked down on” for letting someone else use what you don’t need (or even want).
One way they should start is to lower the base plan and then only sell you as many screens as you need. If you want 4K resolution and live alone, let someone buy a 4K, One Screen plan instead of forcing them to pay for four screens then bitching when they let one to three other people use them. People would probably be more selective with sharing if they had to actively pass more to do it instead of making use of Netflix’s imposed excess.
Update: Mom is not currently watching any shows on Netflix, and I had precious few things I wanted to watch. But after consulting with both my Netflix account and T-Mobile, it turns out that I have Netflix Premium for free as a benefit of T-Mobile membership. So I’m keeping it. (I also got MLB.tv for free with T-Mobile Tuesdays, though it doesn’t show the Nats and Orioles games, and the Nats are the only team I’m passionate about.)
Let’s put the numbers in perspective. A loss of 200,000 subscribers means that Netflix’s base has gone from 221,840,000 to 221,640,000.
Stocks are based on opinions of future value. That’s the only reason why Tesla, which makes less than 1,000,000 of the 66,700,000 cars sold in 2021, is worth more than all the other car manufacturers combined. Insanity is a mild word.
Netflix is facing competition. There are far too many streaming services and some, perhaps many, will die soon. They do expect a huge loss of subscribers in the future, many even as many as 1%. Only a lunatic expecting continuing enormous subscriber growth to the exclusion of all other factors could find this discouraging, since their actual profits went up 10% last year.
I shiver for them.
Agree: exclusive focus on growth is lunacy, at least if you expect continuous growth year after year. You can’t have endless exponential growth in a finite universe.
The comment I saw was that Netflix is in a good position as the largest streamer, but they don’t have the luxury of being propped up by the profits from an unrelated business like Apple+ or Amazon Prime Video.
I saw this comment on Twitter:
I can only hope that all of the steaming services start to struggle due to customers not wanting to pay for 6 or 7 of them and someone does deals for an aggregated streaming service where the customer pays one price for Netflix, D+, paramount and all the others together
To which I responded, “You just invented cable TV.”
The fracturing of the streaming market is making the situation much different than it was when Netflix was king. They were the leader in streaming already released movies and TV series, making them easily available for home viewers. Now that Peacock, HBO Max, Disney+, Paramount+, etc. are pulling back a lot of their own product, Netflix’ pool of content has been shrinking, and they’ve gone full-bore into original content … which isn’t what a lot of Netflix subscribers thought they were paying for.
I don’t know how the streaming market is eventually going to shake out, but raising your prices to provide only specialized (mostly original) content in a world of rapidly growing streaming options doesn’t seem very smart. Unless your original content is far and away something people really want to pay for.
On the one hand, yes, working with well-known creators/showrunners is expensive. OTOH, they can be a draw to get people to actually watch your content – viewers know them from previous shows that they liked, and may be more willing to try a new show from a “known quantity,” rather than a new show from someone they’ve never heard of.
Seems an effective model would be to lock in people’s prices as long as they maintain service.
That way, they are either making money off you during the 5-7 months a year that you are currently unsubscribed, or they are making more money off you when you come back to a price increase.
Netflix scored 27 Oscar nominations (2 for Best Picture) and 129 Emmy nominations. Their original programming can’t be doing too bad.
Whether this model is sustainable is unknowable. Churn is increasing. About 25% of the audience cancels and re-ups within a year, presumably just to binge on the latest hot show. My Magick 9-ball foresees the end of one-month trials and forced year-long subscriptions. Netflix, famed for its data tracking, will probably also alter their offering mix to better suit changing tastes. Maybe someone huge will simply buy them.
And that latter is the future. The field will consolidate. The problem is too much choice. Multiple studies have shown that when given dozens of choices sales actually go down because consumers can’t decide what is best value for their money, so they’d rather not spend at all. A customer base that is both young and fickle won’t subscribe to 10, 12, 20 streaming services.
As @Uncle_Jocko rightly said, cable worked for thirty years by giving people one-stop service, until it started charging extra for each of a dozen specialty channels, none of which were new and hot. I don’t believe there’s enough money and enough talent to stock the current number of streaming services with top-quality must-see buzzy viral shows, so the likelihood of another dozen new services doing so gets smaller by the day.
The shakeout is coming. The only question is whether the lunatics who bought Netflix when it was high will be the losers when it folds or whether they will eventually be the winners when some other lunatic pays a huge stock premium to take it over.
Not quite, cable is just a large collection of broadcast channels. Bundling up streaming services would be unprecedented, and possibly redundant.
A broadcast channel can have only one program showing at a time, so having a bunch of channels makes sense. Having more channels equates to more potential things to watch. Streaming services do not have that issue; they are libraries of shows you can watch at your leisure. So, while Netflix and Amazon Prime Video could merge into a mega library, you can’t have CNN and MSNBC News merge into a mega channel, because you just lose one channel in that situation; if CNN absorbs MSNBC News and gains all of its programming, it will have to cut programs to air them all.
Bundling streaming services seems weird, though I guess maybe what you could do is subscribe to a service that has access to Disney+, Paramount Plus, and Netflix, then presents them in its own UI as one giant library. If you could do that and it ends up costing a bit less than subscribing to them all individually, it might work out well. Though it would have to be worth it to the involved parties. Let’s say each service costs $12 a month on its own (hypothetically, to make it easy). You’d pay $36 a month if you subscribed individually, but Streambox merges all three for $30 a month. That would mean that those 3 services would have to split $30, minus whatever Streambox takes off the top. Would it make sense for them to do that? Maybe it gets them more subscribers, or maybe those people would have subscribed anyway, and those streaming services just make less money now.
I’ve been seeing people absolutely flip out on reddit and hop on a Netflix hate train, which I assume is because they all use someone else’s password and feel super entitled to have access to a lot of content for free.
They’re also effectively lying by posting titles like “netflix is adding commercials” which is not what’s happening. They’re proposing creating a new ad-supported tier with a cheaper subscription, so people can choose if they want to save a few bucks and watch some ads, like almost every other streaming service has. People are losing their minds saying they’re going to cancel their netflex subscription even though they’re never going to be shown ads.
This is all a hysterical overreaction. The first hysterical overreaction is our financial sector deciding that just being a profitable company is worthless, only growth matters. So if you’re a small company that’s growing 30% while burning venture capital, you’re better than if you’re a huge company that rakes in a steady profit year after year. Somehow we expect and demand infinite growth, and you are worthless if you’re not doing that. Netflix could have every person on Earth subscribing for $15 a month, and investors would complain that there’s no growth. Netflix would have to start a space program to find aliens to sign up new subscribers.
The second is the massive backlash reaction among the public I mentioned. People are so entitled that they think netflix charging or removing their ability to get the service for free is somehow some personal crime against them and they’re whining hard about it. It’s obvious that netflix never meant for a 4 screen plan to mean “for every one person that subscribes to our service, 3+ others can get it for free” and it’s bizarre to feel angry about that.
Yes, it drives me nuts when people do that.
First, No, multiple streaming services does not mean "we're basically back to cable"
Secondly, these people’s proposed solutions where we combine all streaming services into one service for their convenience is far more like the thing they’re decrying. You want to give content creation control and distribution all over to one entity… for “convenience”, but you rail against how multiple streaming services is too much like cable? Nonsense.
Plus, even if we did what they suggest and we combined all the streaming services into one, it’d have to cost like $75+ a month. There you go, creating cable again. They claim they want the convenience of having one service, but what they actually want is the unrealistic prospect of having all the content in the world for $15/mo, which is simply not economically viable.
First time on the internet? 
Ultimately it’ll all be a la carte pay-per-view. Champions League Final? $5 a screen. Random home-flipping show on H&G network? 52 cents. Re-run of Gomer Pyle? 14 cents. Etc.
Naturally all content distributers (streaming, cable) want to force you to bundle and pay for stuff you don’t want. That’s been a big part of their profit-strategy. So far.
It’s a crazy notion, I know. It just seems to be ultimately how it could evolve.