Rising competition is forcing Netflix to make sharper choices

AFP

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  • Nando Kasteleijn

    editor Tech

  • Nando Kasteleijn

    editor Tech

The box of tricks at Netflix opens. After years of worry-free growth, the major player in the streaming market is increasingly struggling to attract and retain new subscribers.

The company lost 970,000 subscribers last quarter (which was less than expected) and now has 220 million subscribers worldwide. Netflix expects to add one million subscribers this quarter. Investors are reassured so far. The loss stands in stark contrast to the strong growth the company has experienced in recent years, especially in the first year of the corona pandemic.

“You can now see that the market is maturing and gradually entering a new phase,” says film journalist Nico van den Berg. “It includes a flattening of growth and less focus on the number of subscribers, more on profit and revenue per subscriber.”

New players

An important factor in this is competition. In the Netherlands, Netflix deals with players such as Videoland, Disney +, Amazon Prime Video, HBO Max and ViaPlay. The overall offering, including niche platforms, is even greater. Though no one comes close to Netflix in size.

Figures from the analysis agency Telecompaper show that newcomers HBO Max and ViaPlay are already knocking on the door to the top 5. The services were helped by solid introductory agreements and, in ViaPlay’s case, also the start of the F1 season, for which it has the broadcasting rights.

That means Netflix needs to switch. Like all other platforms, it can roughly operate on two buttons: content and revenue.

Such is the new season of Stranger Things put online in two phases, to spread the attention period and try to keep people longer. The action film will also be released on Friday The gray man online. With a $ 200 million budget, Netflix is ​​hoping for a success story. And one with possibly more parts, or one franchise. The New York Times refers to the successful James Bond series and Impossible mission. These are big ambitions.

magic words

According to film journalist Van den Berg, ‘franchise’ is now the magic word on the market. “Franchise works for a certain type of business, Disney is a good example of that. But you can’t just do that with any platform.” He points out that Disney can benefit from big movie launches, theme parks and merchandise. “Netflix does not have these things.”

Then the convert button. Because of the growth of recent years, Netflix did not really need to think about this. When the figures for the first three months of the year were presented, it suddenly became clear that one would take a closer look at the possibility of password sharing.

You can also do it yourself: log in to a family member or friend’s account (and share the cost or not). According to Netflix, this will cost about 100 million subscribers worldwide. They also want them as a paying member. They are now experimenting with the solutions – for example, the possibility of adding an additional address for a fee.

Finally, the company comes with a subscription price at the lower end of their advertising offering. It should help attract people who now think it’s too expensive (or piggyback through password sharing). For this, it has signed a lucrative agreement with Microsoft, which will take care of the advertising network.

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