Last month, Netflix announced that it had lost 200,000 subscribers, the first time in the company’s history. The company is expected to lose even more in the coming quarters. 150 employees and dozens of contractors were also laid off. Per bloombergNetflix has about 221 million subscribers and generates about $30 billion in revenue. How can a successful company not afford to keep everyone they want? Of course, it was a sign that Netflix was going down, down for the last time.
You may have gotten this idea if you look at some of the stories about companybut it’s still too early to announce the time of death. Netflix is at a crossroads that all streaming services will eventually come to, but there’s no reason to think it’s not going anywhere. In fact, it is still the king of the hill, no matter how many steps down it stumbles.
Why is Netflix losing subscribers?
First, what caused such a drop in the number of subscribers? There are many potential reasons. Remember that war that is going on in Ukraine, which has been dragging on for several months now since Vladimir Putin sent the Russian army to invade a sovereign country? Netflix, like many other companies, has gone to great lengths to support Ukraine, which in this case has meant suspending service in Russia. Almost 150 million people live in this region, so obviously this will reduce the number of subscribers.
There’s also the fact that Netflix just has a lot more competition than it used to. There was a time when Netflix was the only company that streamed TV shows and movies directly to people’s homes in exchange for a subscription fee. But those days couldn’t last forever. The ring is so crowded right now that you can hardly land a punch. Disney+, HBO Max, Paramount+, Apple TV+, Amazon Prime Video, even Peacock… For years, Netflix was the only game in town, but now people have other streaming options, many of which are cheaper than Netflix. Of course, followers will start to flake off.
And yet, despite these obstacles, Netflix is still long away the most successful streaming service. Once again, we are talking about a subscriber base of 221 million people worldwide. This is twice as much as the nearest competitor Disney + (about 87.6 million subscribers, for recording). Even if he loses millions more subscribers in the next couple of years, it will still be a long time before he is overtaken.
What goes up must come down
And that’s another problem: When it comes to subscribers, Netflix may have gotten as much as it can get, at least without changing its business model. 221 million subscribers is a lot, but it is still a small fraction of people on the planet; Most people don’t have Netflix because they aren’t interested in TV or movies, can’t afford it, or live in a part of the world where it isn’t available. And aside from improving internet connectivity in parts of the world that don’t currently have one, there’s not much Netflix can do about it.
Now, in business, if you don’t grow, that’s a problem. Netflix is exploring ways to grow further by expanding into new markets — it’s trying to add video games to the service, for example — but lack of growth doesn’t have to be an existential crisis. With 221 subscribers and hundreds of shows and movies, it’s not a bad place. If they focused on retaining their customers and creating enough quality content to combat the effects of churn — a process where people leave and come back as they please — Netflix could dominate the streaming wars for years to come without saying already about continuing to do great things and hiring a lot of people; they currently have around 11,000 employees.
Netflix game plan
But I don’t think the company’s executives would give up on growth just because, so what is Netflix doing to get stronger? Well, there’s the video game plan we’ve already mentioned, though whether or not Netflix can break into this crowded market has yet to be decided; it has dominated TV and movie streaming for years, but there are already many companies trying to stream games and there is no clear winner yet.
In addition, Netflix CFO Spencer Neumann said the company plans to cut costs, which could mean fewer original shows and movies in the future. To be honest, given the sheer amount of things Netflix does, this might not be a bad idea; the company has an approach to content that is to throw everything on the wall and see what sticks when it greenlights a ton and hopes the best things stick. Focusing on things he thinks will work can mean that good content keeps popping up while mediocre stuff disappears without anyone noticing.
Again, who said that Netflix would give the green light to projects like squid game or very strange things didn’t they say yes to everything else that came into their view? Sometimes you don’t know something is going to be a hit until it comes out. But overall, I think Netflix could be a little more picky.
Netflix is also experimenting with ways to deal with password disclosure, although it hasn’t been very good so far. And then there is the possibility of price increases. At the moment, the basic plan costs $9.99 a month, which isn’t a lot, but services like Disney+ and Apple TV+ fall short.
If I were running Netflix, I would do everything in my power to stop the bleeding, but I understand that with the streaming wars evolving the way they are, losing subscribers is inevitable. I think Netflix has a lot of reasons to be optimistic about the future, especially as it continues to release so many hits. squid game phenomenon, people are still talking about the newest season very strange things, Bridgerton huge and there many world hits we don’t hear that much in the US, including Hometown of Cha-Cha-Cha, money robbery, flow queen and more. Netflix has a plethora of popular programming and it seems like the next big hit is always around the corner.
Basically, I’m just a little tired of the backbiting around the streamer. Changes are coming, as always, but there’s still a lot left in Netflix.
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