Netflix was the undisputed king of streaming services for a long time. In recent months, however, it has been revealed that the streaming giant has experienced a slump in growth and a subsequent drop in its share prices. The big money moves of Amazon Video and Hulu, and HBO’s TV smash hit factory mean that Netflix’s crown may be beginning to slip.
As if that wasn’t enough bad news, the looming introduction of a host of new streaming services by content creators such as Disney, NBC, BBC and ITV threatens to leave Netflix without some of its most popular films and TV shows. All of this begs the question, what’s next for Netflix?
When Netflix began it primarily dealt in licensing other content creators’ works, aggregating popular films and TV shows in one place with a low monthly subscription fee. As the company has grown, they have been investing more and more into their Netflix Originals, and the TV shows in particular have been wildly popular. Stranger Things, Orange is The New Black and Black Mirror are just three examples of Originals that have become worldwide sensations. It is these Originals which will form the backbone of the streaming service once the content creators reclaim their creations.
After a string of successes, the Netflix Originals badge is now a draw in itself for viewers, and the service can push its own content as much as it likes on the site’s homepage. Just look at Bird Box, a Netflix Originals film which was, to put it nicely, of questionable quality (I found it funny-bad). Nonetheless it garnered 26 million views in its first seven days thanks to an aggressive advertising campaign on Netflix (as well as the devious tactic of creating a viral “challenge” based on the film).
Incredibly, Netflix spent roughly $13 billion on their content last year, with Netflix content chief Ted Sarandos confirming that 85% of new spending is lined up to be spent on originals (that’s around 11 billion). So Netflix originals should be the most popular types of content across their platform, but they still aren’t, as Netflix confirmed in a letter to investors recently.
So, if Netflix has a bank of original content and is investing in creating more of it, then why the slump and the worries for those at the top? There are a number of factors at play that may be giving the executives sleepless nights. The new streaming services popping up means a smaller market share for Netflix as well as a loss of viewers to these new services. For example, fans of the US version of The Office may flock to NBC’s service to get their fix, and Marvel or Disney die-hards, of which there are many, will look to Disney’s service instead.
The loss of content and dip in market share are obvious issues for which there may be no solution: content creators want to capitalise on their own work to the exclusion of others, and that’s fair enough.
The real worry for Netflix is whether, in the age of Game of Thrones, Chernobyl and Big Little Lies, they can go toe-to-toe with these series-binge behemoths. Viewers are more discerning than ever, and they are going to have to be: who will be able to afford 6 monthly subscriptions? Certainly not me. Netflix’s recent subscription price-hike was pointed to as another factor contributing to its slump, and this subscription cost is only likely to rise if Netflix is forced to invest more into its Originals to attract big names and deliver quality products.
The quality of the products is exactly what I would be concerning myself with if I was in charge. Netflix may have had impressive figures for things like Bird Box and the third series of Stranger Things, but both of these had lukewarm critical receptions, and, in the latter case, many fans were left disappointed. Viewers these days look to websites like Rotten Tomatoes and Metacritic before they decide whether to see a film or commit to a new series, and if they see bad reviews then they aren’t likely to waste their precious downtime on it.
I don’t know what the solution is, but what I do know is that if Netflix’s production arm can’t match the quality being produced by its rivals, then it may well be left behind.