Netflix Unveils Business Strategies to Compete in Streaming
By Movieguide® Contributor
Netflix recently revealed their future plans and the innovations they hope will keep them as the most popular streaming service available.
After years of uncontrolled growth, Netflix was hit with reality last year when they posted a loss in subscribers during Q1, the first time they had seen a drop in users in over a decade. Since then, the company has been restructuring itself to focus on maximizing profits, rather than subscribers.
The most notable change in the company came when Netflix announced they would be cracking down on password sharing in March of last year. This change came with the introduction of an ad-supported subscription tier, in an effort to provide a cheaper option for users who had previously been using someone else’s account. This crackdown has been tested by Netflix in multiple markets and is planned to be fully rolled out by June of this year.
The company, however, does not expect that the crackdown on password sharing will do much to increase its subscriber count; Netflix understands that it has all but saturated its subscriber numbers from its current markets, mainly the U.S. Thus, the company plans to broaden its original content, creating shows and movies for primarily international audiences to continue to boost its subscriber count.
Netflix also hopes to entice viewers by offering access to live events. The streaming site’s first experiments with this failed. A LOVE IS BLIND livestream didn’t open when clicked and a live-streamed Chris Rock Comedy Special crashed after millions of viewers joined, however, the company views this as an important category to invest in to continue to stand out from other streaming sites.
Even as it focuses on different kinds of content, Netflix plans to continue with its current models of Netflix exclusive movies, which don’t open in theaters, and TV shows that release all at once, rather than on a weekly basis, both of which many of their competitors do.
“You could argue that’s a better business decision – to release a series over 13 weeks,” Chief Executive, Ted Sarandos, said. “But we found a better model for us is to be pro-consumer and give them what they want.”
The company also plans to keep its movie and TV library expansive and continue to add to it every month.
Netflix also plans to continue development within its gaming studio, a Netflix feature that is unknown by many subscribers to the platform. The site releases games onto the App Store and Google Play Store that are free for Netflix subscribers.
“Ten years from now, people are going to spend a bunch of time watching movies, TV shows and playing games – I don’t know in what order, but I’m pretty confident they’re gonna be doing all three of those things,” Sarandos said. “When we looked at the game business, it seems to have a lot in common with what we’re doing now – world-building, storytelling and technology. For us, it seemed like a natural thing to build competence in.”
Another avenue for Netflix to continue its success would come from creating and promoting uplifting and moral content. Positive content is currently drawing in the largest audience, yet many entertainment companies are only just starting to focus on this type of content.
Netflix would do well to capitalize on the large audience of this content, especially as its competitors are leaning towards immoral content. Disney, for example, has recently released multiple animated movies which have featured immoral themes; all of them have been failures and have been poorly received by audiences. Creating uplighting and moral content would be an easy way for Netflix to distinguish itself from other streaming sites, especially as this type of content has a large consumer base.
While Netflix’s loss in subscribers at the beginning of last year may have been concerning at the time, it has proven to be a positive for the company. It has spurred them to continue to innovate to stay at the top of the industry they helped create in the first place.
Movieguide® previously reported on Netflix:
Netflix recently rolled out a plan to crackdown on account-sharing in Canada, New Zealand, Portugal and Spain.
The change comes with a new effort by Netflix to turn non-paying account users into paying subscribers.
This plan requires the primary account holders to set a location for their household, which Netflix defines as “people who live in the same location as the primary subscriber.”
According to The Hollywood Reporter, Netflix will determine if someone is part of the primary household “based on information like whether a device has used the Wi-Fi from the primary location at least once a month.”
A new “paid sharing” feature allows primary subscribers to add up to two people outside of their household to the account for an additional price.
This fee increase results in “an extra CAD$7.99 a month per person in Canada, NZD$7.99 in New Zealand, 3.99 euros in Portugal and 5.99 euros in Spain.”
While the new plan hasn’t been implemented in the United States yet, the policy is expected to roll out sometime in the coming months.
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