How Netflix unknowingly created its problems
The weird business of a streaming service that lost itself by not trusting it's subscribers
It’s been hard to miss the headlines about Netflix losing a couple of subscribers in the last few months. Big news because it was the first time the firm had a declining user base. But still, it’s not really surprising at all.
First off, after the pandemic (which is not really over, but that’s another story) people are spending time and money elsewhere. Combine that with inflation and skyrocketing prices for goods and services and it’s not hard to figure out people are cutting some costs.
It’s logical that Netflix is on the cutting block because it’s a service you use a lot when in a lockdown, but when you’re free to go outside again, that money is easily spent on food and beers with friends.
But while it’s easy to identify this reason, Netflix is blaming people who are not paying to use the service. People who get the account information from friends to use the service while splitting the costs.
But Netflix fails to see it’s been actively promoting this behaviour. Why? Just take a look at the subscription options.
There are three options: basic, standard and premium. Basic should be appealing to most because of the price and the limitation of one stream, but isn’t since it doesn’t offer HD-content. You have to watch series and films in quality you won’t even see on YouTube anymore. Nobody wants to pay for stuff that’s unwatchable.
So most people will choose the more expensive standard or premium options since they do offer HD or even UHD. Now, the issue is that these subscriptions offer multiple streams at once, and I don’t know about you, but I’ve never ever watched two movies or series at the same time. So it’s a very useless feature you have to pay for.
Subscribers with a brain use this feature to their advantage and ask friends and family if they would like to share a subscription. You share the costs and the amount of streams. that way you get Netflix cheaper and in better quality than the standard offering.
My point is that Netflix is pointing the blaming finger to the wrong people. It should be looking at itself and it’s dumb subscription structure. Not blaming the subscribers who use what they pay for.
Also, but this is very subjective, I feel the quality of content has been declining steadily over the last two years. That might be due to the pandemic, but I’m not so sure. I think maybe Netflix is a bit stuck in the data and concluding we all like crappy shows we put on in the background to pass the time, so we get more of that.
But let me know why you think Netflix might be struggling.
Have a good one,
Dennis
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