Wed. Nov 13th, 2024

Netflix won the streaming war

By ki0nk Oct14,2024
New

Netflix subscriptions fell in 2022. A strategic change was needed.

We all remember Netflix’s 2022 strategy change, which many analysts believed was the platform’s downfall. Though its shares fell and the public seemed to turn against it, it won the streaming war. A controversial decision that gave it complete dominance over its competitors.

Everyone against Netflix. The pressure Netflix faced before spring 2022 was unprecedented. Disney+, which launched in the autumn of 2019, and Apple TV+, which is more exclusive, appeared quickly. A few years later, Warner rebranded HBO as HBO Max to compete with the new platforms. Each followed Prime Video, the oldest, which added more of its own content to its catalogue. Only Peacock and Paramount+ joined them in the US.

Debacle revealed. At its first quarterly meeting in spring 2022, Netflix informed investors that it had lost around 200,000 subscribers, causing its shares to drop 25%. There were many reasons, including its overflowing release schedule, which saw 79 films released per month in 2020. Furthermore, Disney+ and other competitors were growing without apparent emergency measures. Netflix offered investors cheaper subscriptions with advertising to stop subscriber loss.

However, Netflix’s most radical move was to end unlimited account sharing, which it had promoted since its founding as a smart marketing strategy. We all remember the massive customer response to the announcement: it would cost the platform dearly. Here we are.

“The Great Correction.” Since account sharing was banned in May 2023, Netflix has added 45 million subscribers and its share price has increased by over 300%. An item is not directly related to another. Netflix changed its strategy after Reed Hasting left and Greg Peters and Ted Sarandos took over as CEOs.

Little by little. At the start of 2023, Peters tested shared accounts in Chile, Costa Rica, and Peru. Netflix planned other changes. It offered cheaper subscription plans with ads for the above program system in the fall of the previous year. It listed its ten most-watched programs to complete the announcement.

Enjoying others’ misfortunes. According to the Financial Times, Netflix no longer needs to spend a lot of money to attract big names in the audiovisual world like Martin Scorsese or Shonda Rhimes. Instead, big names are fighting to work with Netflix. This is in addition to the fact that Netflix remains a platform on which one can work during traditional film industry crises, such as the pandemic (when all platforms skyrocketed) and the recent screenwriters’ strike and subsequent months, when subscriptions continued to grow.

Only benefits. Its newfound platform war victory has allowed it to cut production investment. According to the Financial Times, the platform has reduced its 17 billion dollar annual investment until 2022 to 13 billion during the strikes last year. It remains at that amount, but platform sources say they may raise it later.

Many factors. Netflix dominates its competitors due to many strategic moves, some more obvious than others. We must remember that it is becoming an agglutinator of third-party licenses and that its production of video games and broadcasting of live events may turn the platform around. The latest chapters of a transformative 2022 evolution.

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