Movies

Netflix shock! Radical changes to the program are expected

Netflix saw its subscriber numbers decline for the first time since 2011. Now the streaming service has commented on the possible reasons for the downtrend and how that could affect future plans.

Netflix is ​​a fixture in the highly competitive streaming market. Although competitors like Disney + are pushing hard, the Netflix subscriber curve has always been up until now. According to the quarterly report, the number of paying customers fell from 221.84 million to 221.6 million in the first quarter of 2022, which means a decrease of a whopping 200,000. The numbers also have a negative impact on the performance of the stock. Now Netflix is ​​considering several measures to improve the balance again.

Also under discussion: shorter seasons or an ad-funded model where customers would be shown individual ad clips in the future. They also want to take even tougher action against illegal account sharing.

Program changes affect all users

Netflix would like to cut costs in the future and choose better programs. From the circles of Netflix, for example, we hear that there will hardly be more talk shows and musicals because these genres are no longer so popular. At the very least, the money goes into other areas like documentaries and unscripted reality shows.

But the cuts to series in general and to episodes in particular are expected to be significantly tougher. This trend is already visible. So, the second season of the series “Matryoshka” (eng. “Russian Doll”) has one episode less than the first season. Not the only example of shorter seasons. If you’re wondering how one less episode should help Netflix out of its misery, you need to understand the sometimes huge production costs. An episode of “Stranger Things” is said to cost around $ 30 million.

Speaking of “Stranger Things”: Netflix will probably no longer produce such expensive productions in series. Instead, we need effectiveness. You’re probably looking for cheaper productions that still carry a lot. The best example of this is “Squid Game”. But these experiments can also go wrong. So users simply get less quality.

The last lever is the shortening of the individual episodes. This possibility is also in the room and should probably be implemented. However, Netflix manager Bela Bajaria says the shorter episodes have no economic reasons, only creative reasons.

Will we see announcements on Netflix soon?

In response to the numbers, Netflix could take another radical step. CEO Reed Hastings previously voiced his opposition to the idea of ​​showing ads on Netflix. Suddenly Hastings plays a completely different note. The company plans to engage in an ad-supported streaming strategy in the next year or two. They are very open to the idea of ​​offering a cheaper model associated with advertising. The Netflix boss justified his rethinking with more choices for users.

“But as much as I am a fan, I’m an even bigger fan of consumer choice.” And for consumers who want a low price and are ad tolerant, letting that happen makes a lot of sense. “

Reed Hastings, Variety

Also interesting: the experts were already expecting advertising on Netflix in 2019

Account sharing should be punished more severely

It is known that multiple people share a Netflix account and it is also allowed within a family. But no further. Due to poor quarterly data, Netflix plans to take even tougher action against illegal account sharing in the future. According to COO Greg Peters, they want it within a year Charge additional fees for shared accounts. This practice is already being tested in some South American countries.

Also interesting: how exactly does Netflix act against unauthorized account sharing and how does the streaming service actually recognize it?

This is behind the loss of customers on Netflix

In general, it has long been observed that Netflix’s growth is slowing down. According to Netflix, this is generally due to the great competition and the now high penetration of households. If not, the streaming service cites the economic consequences of the pandemic and the Russian war in Ukraine as the main reason for the new, worse numbers. In a letter to the shareholders it is said, among other things:

“Macro factors including slow economic growth, rising inflation, geopolitical events such as the Russian invasion of Ukraine and some ongoing disruptions due to COVID are also having an impact.”

Netflix

Among other things, Netflix deactivated 700,000 customer accounts in Russia in response to the war of aggression. The streaming service has lost hundreds of thousands of additional subscribers due to rising prices in the US and Canada. Netflix itself also cites illegal multiple account use, which is still widespread. According to Netflix, around 100 million households would already use the streaming offer without paying for it themselves.

Netflix still far ahead of Disney +

Even though Netflix is ​​showing a downward trend for the first time in over a decade, it is still ahead of the competition. For comparison: In February 2021, Disney + had 130 million subscriptions to number 2, a difference it may not have made up for in the last year. And despite the fewer users, Netflix still posted $ 1.6 billion in profit this quarter. However, the streaming service again expects fewer subscribers in the coming months. Whether there will be further consequences remains to be seen.

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