They expected to gain about 2.5 million subscribers in this first quarter. However, the numbers did not turn out as Netflix I expected. Conversely, the company recorded the first drop in its history, with the loss of 200 thousand users which, despite representing only 0.09% of its total subscriptions, was enough to set off alarm bells in the business world.
Its shares on the stock market plummeted by 24%, opening the way to the platform’s first crisis after eleven years as the leading streaming market. Reasons? Multiple. The war in Ukraine led the company to suspend the service and cancel all its projects in Russian territory, losing a large number of subscribers in that country (there is talk of 700 thousand).
Netflix has also insisted that another cause may be the damage caused by the practice of sharing accounts: there are people who access their grill without paying in return. Meanwhile, the specialized press points to other factors, such as the emergence of new streaming services and the quality of their catalog; Although numerous and with audience successes, at times it pales compared to the diversity offered by other competing firms.
Is the current Netflix offer also responsible for a drop that is presumed to increase with the course of the year?
The journalist and film critic for Radio Pauta, isabel plant, explains the role of the platform through a metaphor: in terms of catalog, Netflix aimed to be a kind of wholesale supermarket with a gigantic offer. “Beyond quality, what Netflix does promise is that you can find something for all tastes: anime, children, truecrime, movies and series”, he explains. This, while other services, such as HBO Max, exercise a content curatorship more comparable to a “boutique”.
In this context, Plant points out that the main problem does not necessarily lie in the quality of the products, but in the multiple streamings that cohabit the market. “I don’t know if this catalog that we have today from Netflix is much worse than the catalog that was seven years ago. What happens is that it has too much competition, and in the content war, what counts is the series or movie of the moment. And now there are too many other places to see them.”
Christian Ramirezcritic and founder of the site civilcinema, share the diagnosis. “The great discussion at the beginning of this was that whoever had the most movies in his library, and who managed to make them available to users, was going to win this war. And it didn’t happen that way,” says Ramírez, referring to the practice that some platforms have of acquiring titles to avoid being under the domination of their competitors.
From his point of view, the most relevant falls on the feeling that the market is peaking. “This market, which was seen as a kind of bottomless pit whose reserves were never going to run out, is beginning to reveal itself as limited,” he points out. “It seems to have reached a point where returns are going to be diminishing. And that is the cause of the collapse.”
For Rodrigo Munizaga, film critic at Cult, the quality of the titles did not have much to do with the success of the platform either. “The quality of the content is important for one to want to be or continue to subscribe, but it does not tip the balance. HBO Max has better quality, but in Chile it is not as massive, despite the fact that it even costs less per month. People want to have Netflix, because their acquaintances have it. To this day, only Netflix series become media and tuning phenomena, which everyone talks about. That does not happen with the series from Amazon, Paramount + and others and quite a bit happens with those from HBO Max or Disney, with few exceptions, such as Succession either The Mandalorian”.
Asked by Cult, Liz Shannon Millereditor of the american magazine resultspecializing in pop culture, expresses that, both anecdotally and based on statistics, Netflix is no longer an essential resource for fans of TV and movies, especially in the United States.
“I have friends who have decided to cancel their subscriptions not only because they are disappointed with the current catalog that the platform offers, but also because they have no interest in future content that they may offer. Even huge titles like stranger things They are no longer as popular as they used to be. This could all change in a few months, but right now it’s hard to find reasons why Netflix subscribers should stick with the platform.”
There is also a point there: according to various publications, Netflix has focused its bets too much on a rather youthful audience, with hits like stranger things either The Bridgertonssubtracting diversity.
Munizaga agrees about the role played by the emergence of new applications. “Netflix stopped running on its own, as it did until about three years ago. Its catalog included series and movies from Warner, Disney, Paramount and other studios that launched their streamings and, then, Netflix lost all that content”, he specifies.
What does seem to be a general consensus is that, inevitably, the company was hit by the global economic crisis. “(In Britain) there had already been leaks of Netflix accounts and many people were willing to leave the service three months from now because, in times of high inflation, the first thing you cut is non-essential services. And now that we are no longer locked down with the pandemic, if you have to start cutting extra costs, the streaming you are using may be one, ”says Plant.
As for solutions, Liz Shannon Miller points to the need for the company to reevaluate its metrics to measure success. “The real existential crisis Netflix is facing is the idea that they will never get all 7 billion people on the planet to subscribe to their service, and that they may have stalled in terms of reach earlier than anticipated. Its main metric for measuring success has been, for a decade, growth in subscribers. And that is a big problem. Improving their catalog is one solution to that, but overall they may need to re-evaluate how they measure success and growth moving forward to find a sustainable place in today’s ecosystem.”
Even so, it is possible that the crisis does not imply major problems for the future of the platform. This is how Ramírez concludes: “I think it will be a catastrophic event due to the amount of money that was lost in the valuation of the company, but there is a knife in the heart of the red N. No, I do not think so. Most likely, she is obliged to temper expectations of her. Yes indeed”.