The case of Netflix is quite striking. Despite the appearance of countless streaming services for movies and series that try to dispute its leadership, the platform has managed to remain the top benchmark in the sector. However, his world seems to have been turned upside down since in April he reported the loss of 200,000 subscribers in the first quarter of 2022. And the estimates for the second quarter are even more worrying, since he projects to suffer the departure of 2 million users plus.
Not a month has passed since the news was known and Netflix brought out a contingency plan that attacks different fronts. On an economic level, the company has chosen to finance less quantity of original content, but of higher quality. This does not mean that he intends to reduce his investment —in fact, he will increase it by 20,000 million dollars—, but rather that he wants to be more selective with the projects, and that has already set off alarm bells among producers in Hollywood.
In addition, it announced the launch of a cheaper subscription plan that will include ads (apparently coming this year), and has started exploring the possibility of getting into the world of live event broadcasts. And as if that weren't enough, he wants to go hunting and find all those who share their account passwords so that they stop doing it.
All that said, it's clear that Reed Hastings' company seems to have come out of its lethargy; although more out of obligation than conviction. However, the worst thing Netflix can do today is act out of desperation. The platform continues to lead the market and has the wherewithal to do so, and needs to address some key issues to reverse negative criticism and start building after a rocky start to the year; among them, offering a more curated catalog and being more aware of what is happening behind the scenes with the competition.
Netflix must adjust its strategy
The feeling remains that, in recent weeks, Netflix has stepped on the accelerator on issues that had been “asleep” in recent years. The first user drop in a decade was a painful but necessary reality check; especially, so that the company abandons the level of comfort that it had recently adopted.
Netflix became isolated to the point of not even considering whether its release dates coincided with big releases on rival platforms. One of the most notorious cases was that of the Daybreak series, which debuted on the service at the end of October 2019, just at the moment of greatest expectation for the presentation of The Mandalorian on Disney +, which reached the public just a couple of weeks later.
The failure of Daybreak was such that in mid-December, when two months had not yet passed since its premiere, Netflix decided to cancel it. And the problem was not the criticism towards the production, which received mostly positive comments, but the lack of impact among the public. Jeffrey Fierson, producer of the series, did not hesitate to blame the streaming service for its poor launch logistics. “If there's one thing I'd say is Netflix's fault, it's that it's an island. They may not see what's going on outside their walls, or they may know and the arrogance is so big they don't care,” he told The Wall Street Journal.
And his turn to the video game industry does not seem to have helped him maintain focus either. In the last year, the platform has been very aware of launching its games for iOS and Android —and absorbing the odd studio along the way—, and so far none have been the passion of crowds. This also raises doubts as to whether his commitment to gaming is really justified, although it is an issue that we will address in depth on another occasion.
Beyond applying necessary changes, Netflix's worst mistake today would be exceeding itself in its attempt to compensate for mistakes or negligence of the past. If the company rushes to make crucial decisions, it is likely to fall by the wayside and its relationship with users will suffer even more.
