For the longest time, Netflix has been unstoppable in its domination of the streaming industry. With this domination of the industry, Netflix has seen growth over the years. But this most recent quarter, Netflix has reported its first loss of subscribers after they had reported their quarterly earnings. This is a major hit to Netflix, for the days after the report Netflix stock dropped 35% and lost a market cap of 50 billion. For the Netflix shareholders, the stock of the company had around a $150 drop from $350 to approximately $200 in just a week. This is the first time that Netflix has shown weakness in the stock market as it has always been growing. With that being said, Netflix is desperate to retain the subscribers they have. Netflix predicts to lose more subscribers in the coming year and that may be attributed to increased competition and the increasing amount of websites that allow people to account share. Following this report, Netflix has announced some major changes to its service.
Netflix started its streaming service by streaming movies and shows that were created by various production companies. Over time, Netflix started creating its own content and invested heavily in production. In the recent boom of streaming services, Netflix has lost dozens of shows owned by different media companies. Many of these shows, such as the Office and Friends, have been flagship shows of the streaming service and had been recently removed. Even though Netflix has increased the amount of self-produced shows, many of the shows and movies are not well received. In addition, the shows that are hits are released months apart from each other which further prevents people from binging. Netflix is being put in a tough spot financially and had to make unpopular decisions regarding the cancellation of some shows and movies.
To start, Netflix has also cut back on its diversity in the original production of content. After the subscriber loss, Netflix fired the director of creative leadership and development for original animation. This means that Netflix will be cutting back on the amount of original animated shows they release. Some feature films and shows with big names were also axed in the cutback. “Bright 2” starring Will Smith was one of the first movies to be axed. In addition, the show “Pearl” starring prince Harry and Megan Markle was also axed. Netflix has however also kept some of its flagship productions off the cutting board. “Stranger Things” is slated for its final season at the end of this year. Another show that is safe is the second season of the popular show Squid Game. There is a couple of other popular Netflix series that have escaped the cutting block, but some say this will not be enough for the retention of subscribers.
When asking around the University of Minnesota about Netflix’s situation, freshman student Tommy Fritz had this to say, “ I feel like Netflix has lost subscribers due to pushing content that the subscribers don’t really want and there is nothing to look forward to either.” Tommy is a subscriber of Netflix, but he thinks that the current releases and content don’t appeal to him and that the specific agenda Netflix has does not appeal to a majority of subscribers. In addition, he thinks that there is not enough new content to have him excited to go on Netflix. He later said this about how Netflix might bounce back from its cutbacks, “In the future, I think Netflix will gain more subscribers with their introduction of video games to their streaming service.” Overall Tommy thinks that this current slump in subscribers is just a temporary problem and will be resolved in the near future. Many students had the same opinions as Tommy when asked about their point of view on the situation at Netflix.
Netflix’s first quarter of the year is a stark contrast to the company that we have seen in the past. Many have noted the streaming service’s success in consistently gaining subscribers. This recent report on the subscribers shows that something is wrong and subscribers are not happy. It is only speculation if the right decisions were made regarding the cancellation of multiple shows. Netflix is a company that has one of the most advanced databases on their customer trends and is known to be ahead of the game when it comes to innovation in the industry. Time will only tell if Netflix’s decisions were good enough to stop the outflow of subscribers.