RIP NETFLIX?
Investigating the curious case of Netflix. Plus a Weekend Streaming Recommendation!
Before we get into it, today’s topic was decided by my Instagram and Twitter followers! If you want to help guide the direction of the Kino, follow me on IG @thekinosexual or on Twitter @kinosexual. Every follow helps!
Here Lies …
The harbinger of the streaming era may also be its first casualty.
Netflix. The company that revolutionized the entertainment industry. The company that has changed how we consume content forever.
Yet, it’s currently in dire straits. Its stock has plummeted, it’s laying off employees left and right, it’s phasing in advertisements (which they promised never to do). And worst of all? They’re bleeding subscribers left and right. Netflix lost nearly 1 million subscribers over the last quarter alone. What’s going on?
Here are three reasons why Netflix is down in the dumps:
1: Exorbitant Budgets
As I wrote in my post a few weeks ago, A ‘Limited Series’ of Unfortunate Events, streaming platforms generate most of their money off monthly subscriber fees. They grow their subscriber base by providing content that attracts viewers. Netflix made it big off of their original series, with shows like House of Cards and Orange is the New Black bringing the service to prominence and new series like Stranger Things, Squid Game, Money Heist, and Bridgerton keeping users subscribed.
But their quest for content has led to gross overspending. Netflix is notorious for hugely inflated TV show and movie budgets, reportedly spending over $30M an episode on the last season of Stranger Things! Couple that with a tendency to cancel beloved shows, and there’s a real content issue at hand.
2: Streaming Schisms
Netflix signs licensing agreements with other studios to populate their ‘back catalog’, which includes everything that isn’t a Netflix Original. Before other streaming services existed, this extensive and easy-to-access back catalog is what brought users to the platform. You could watch anything on Netflix. And if Netflix didn’t have it, there were no other streaming platforms that did.
The reality has changed. As long-standing entertainment studios form their own streaming services, they are splitting up Netflix’s back catalog as the licensing agreements run out. Think Paramount (Paramount+), Warner Bros (HBO Max), Disney (Disney+), and NBC Universal (Peacock). Back Catalogs do not drive nearly as much subscriber growth as new content, but they’re one of the largest reasons subscribers stick around. Netflix just doesn’t have the history to compete.
3: Subscriber Saturation
Netflix is still an undisputed behemoth. There are around 120 million households in the US, and Netflix has 73 million subscribers in the US. They’ve tapped out the US market about as far as they can go, not to mention their international presence.
They boast an incredibly impressive run, but in the eyes of financial analysts and the business world, it’s all about future growth. Unfortunately, there’s only so much left to be had.
The Path Ahead
So where does that leave Netflix? It depends on how you look at it. From a business perspective, you could argue they’re making the right moves to boost revenues. An ads tier (pulling from other models like Hulu), cracking down on password sharing, cranking up prices, etc. But to be honest, these all suck for the average consumer. Here are a few solutions that will benefit Netflix AND its subscribers:
1: International Expansion
The one thing Netflix boasts that no other streaming service has is its staggering international selection. They’re the company most active in garnering international content, working in all sorts of markets (Nigeria, India, all over East Asia, etc) to expand their reach. I know that’s a main reason my family has stayed on the service, and it seems to be the next phase of their growth. After all, Asia was the only geographic region that grew in subscriber count this past quarter.
2: Belting out innovative content
Squid Game, Netflix’s most popular property in 2021, cost just $21M to make, and no one could have predicted its success. It ultimately brought the company nearly 1 billion in profits. Producing the next hit show or franchise is in part random, and Netflix should continue funding innovative and small-scale artists, while keeping the budgets reasonable. The next big franchise is just around the corner.
Kino posts you may have missed!
TOP GUN: MAVERICK REVIEW [Spoiler-Free]: A review of the biggest movie of 2022
CHRISTOPHER NOLAN RANKED: Analyzing one of the best directors of all time
THE ART OF VISUAL EFFECTS: The magic that makes movies happen
THE BIG BAD BOX OFFICE: A peak into the finances of Hollywood
THE HOLLYWOOD ‘BOD: A how-to guide on getting a Hollywood physique
The Faithful Biopic: ELVIS (2022): What makes a good biopic? Does ELVIS do it?
WEEKEND STREAMING RECOMMENDATION
Black Mirror: Hated In The Nation (2016), Available on Netflix
Black Mirror Season 3 was one of the first Netflix Original series I ever binged, so I thought I’d share my favorite episode from the season. In near-future London, a police detective investigates a string of mysterious deaths with a sinister link to social media. Black Mirror is a science fiction anthology TV series that investigates all the dark intersections between tech and society. This episode in particular will chill you to your core, and is especially relevant today.
See you all again next week. Until then, please get in touch if you have any thoughts or suggestions you’d like to share. If you want to keep up with what I’m watching, follow me on Letterboxd @atharv_gupta.
You can follow The Kinosexual on Twitter @kinosexual and on Instagram @thekinosexual
Thanks for reading The Kinosexual! Subscribe for free to receive new posts and support my work.