Streaming services are having a bad week.
Exactly one month after launching, CNN+ shut down. The streaming service aspired to fall in the footsteps of heavy hitters like HBO Max, Disney+, Paramount+, and the one that started it all: Netflix. CNN+ may live on in notoriety, a symbol of over-saturation in the streaming market, a sign that consumers have streamed all they can handle.
Unfortunately, Netflix isn't having a great week either.
The streaming giant – which launched in 1997 – announced that in the first quarter of 2022, it lost 200,000 subscribers, a disclosure which sent its shares plummeting 35% and shedding roughly $50 billion in market capitalization.
So, What Exactly Happened?
Netflix had plenty of answers for where the subscribers went: citing increased competition as a significant problem. Additionally, Netflix made a decision to drop all its subscribers in Russia because of the war in Ukraine.
While the streaming service faces more competition than ever, Netflix's competitors also suffered this week, with Disney+, Paramount+, and Discovery+ all reporting a decline in their stock value.
In a letter to shareholders, Netflix had to deliver the bad news: for the first time since 2011 – they lost more subscribers than they signed up. Back then the catalyst was the announcement of a price hike.
Beyond streaming competition and international conflict, other problems that besiege the company include: lifting pandemic restrictions means fewer people are home watching Netflix, password sharing, and desirable content jumping ship to other streaming platforms.
Peacock took The Office. HBO Max took Friends. Disney+ took everything else. Does Netflix really stand a chance?
A Series of Blunders
Netflix also announced its grim forecast for the rest of the year, cautioning its shareholders that they expect to lose two million more subscribers, then dropping the bombshell – ad supported options are coming to Netflix.
Reed Hastings, the co-CEO of Netflix, had long been vocal in his opposition to advertising but seems to be reconsidering. “Those who have followed Netflix know that I've been against the complexity of advertising and a big fan of the simplicity of subscription.”
He then went on to say, “But I'm a bigger fan of consumer choice and allowing customers who would like to have a lower price and are advertising-tolerant get what they want.”
Within the next 2-3 years, Netflix could follow in the footsteps of rivals Hulu and Peacock, offering in-app advertisements for a lower subscription rate. It's too early to see how advertisements might disrupt the service or if customer backlash could stop this plan in its tracks.
Before news of potential advertising, Netflix was making plenty of enemies, announcing both a price increase and a plan to crack down on password sharing, a new feature they will first test outside of the U.S.
Cancellations were up 61% in March, while global sign-ups declined 16% in the first quarter. People aren't happy. Their competitors' attack is two-fold: they take subscribers and take good content Netflix used to have. And with successful shows like Stranger Things coming to an end, what exactly does Netflix offer its subscribers?
Enter Elon Musk
The world's richest man has come out on his Twitter pulpit to criticize the streaming platform. He recently tweeted: “The woke mind virus is making Netflix unwatchable.”
Known for his polarizing hot takes, the Tesla CEO became Twitter's largest shareholder after criticizing the platform for not taking freedom of speech seriously. In March, he conducted a poll that said: “Free speech is essential to a functioning democracy” and then asked: “Do you believe Twitter rigorously adheres to this principle?” 70% said no.
Will Musk continue to come after Netflix, or will he be distracted by his looming purchase of Twitter?
The Kingdom Is Falling
Netflix was the first streaming service to win a Primetime Emmy Award – in 2013 for House of Cards. Since then, Netflix has continued to be a threat at the Emmys, and in 2021, for the first time, they took home more awards than Emmy darling HBO, winning 44 awards.
With so much original content and a great back catalog of oldies, Netflix seemed like a necessary addition to any home. But, now, with competitors offering both original content and lifelong classics, Netflix will have to rethink the streaming game they made popular in the first place.
Netflix turns twenty-five this year. Will it make a comeback or disappear into anonymity?
Netflix dominated how we thought about consuming movies and TV at home and how we talked to each other. “Netflix and Chill” entered the vernacular, and perhaps that will always be what we call it, even when we're watching HBO Max.
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This post was produced and syndicated by Wealth of Geeks.
Featured Image Credit: Unsplash.
Justin McDevitt is a playwright and essayist from New York City. His latest play HAUNT ME had its first public reading at Theater for the New City in September. He is a contributor for RUE MORGUE where he lends a queer eye to horror cinema in his column STAB ME GENTLY.