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MagyarCheckMag | The Death of Netflix may have been greatly exaggerated – or maybe its rivals are all just doing even worse
The April announcement by Netflix was definitely a shock to the system at the time, with a net loss of 200,000 subscribers globally and projected a further loss of two million over the next three months. The news sent its share price tumbling by more than 35%, or over $50bn; but the concerns that this was the beginning of the end proved to be a little overdramatic. In fact, all of its headwinds – in the face of saturation, content wars, and fading subscriber loyalty – seem to have hit competitors even harder, though Netflix's may have simply suppressed them with sheer momentum rather than truly winning the battle.
In fact, some of the biggest hits to Netflix's mindshare came from self-inflicted wounds done in the name of squeezing more cash from a saturated market. Price hikes, price hikes disguised as reshuffling of subscription options, and subscription pushes disguised as a password-sharing clampdown were all taken very poorly in the context of a squeeze in ordinary household budgets. All of these hit around the same time that it was haemorrhaging third-party content, especially in the US, with shows being pulled from it left and right in order to find a new home on brand new upstart platforms.
Except those rivals making the jump from the world of traditional network TV – like Disney+, Discovery Max, Paramount+ and Peacock – seemingly poured immense effort and resources into their own efforts before doing any analysis to see if they could actually stand on their own two feet.
A saturated market is, at the end of the day, a saturated market, and not quite grasping that reality ended up leaving the TV titans of old around $5bn out of pocket in 2023. Even the sheer scale and number of Disney's owned properties hasn't been enough to have its service land on its feet and avoid burning through cash in a quest to reach a sustainable subscriber count – and if the House of Mouse is still struggling to find its feet, it's not surprising that Paramount+, which drew eye-rolls even back when it was CBS All Access launching with Star Trek and The Big Bang Theory as its only real headline acts, is deep enough in trouble that its parent company is looking for a buyer.
There is still something to be said for Netflix being the incumbent, which is probably why it's weathered the storm and clawed its way back to profitability since the doom sayers forecasted their, um, doom. With its independence and size, it's the clear platform of choice for network-agnostic arrivals ranging from Arcane to the David Beckham documentary. But it can't fully escape the wider systematic issues at play in the streaming industry – market saturation is market saturation, is market saturation, after all – and some of its most viral hits like Squid Games (both the fictional and real versions!) and Stranger Things are more akin to one-off cultural events that promote unproductive subscriber churn more than long-term customer loyalty.
These days, the streaming market is... if not a zero-sum game, it's not far off of one. Consumers aren't going to want to shell out for dozens of subscriptions, and network-owned walled gardens are just putting themselves at a disadvantage. And if the other independent incumbents – Apple TV+ and Amazon Prime Video – aren't interested in picking up their messes, it seems like the would-be Netflix Killers will either have to consolidate to beat it, or crawl back to rejoin it.
Or, I dunno. Maybe Satya Nadella comes in with a steel chair and launches Zune Video Copilot+. Anything's possible these days.
Source(s)
BBC News, Financial Times (via Financial Post), LA Times
