“Scandal”, “Bridgerton”, “Heist of Money” or rather “Stranger Things”? The choice of streaming service Netflix is almost endless. When the corona virus drove millions of people around the world into isolation, on-demand series experienced a real boom. This now finds a temporary stop. On Wednesday night, the US group published the figures for the first quarter. 200,000 paid subscriptions were lost, and the share price lost more than 25 percent after the trading day.
What are the reasons?
According to Netflix, it has 221.6 million users. The January-March drop in subscriber numbers is the first in more than a decade. One reason is the abandonment of the Russia business, which cost 700,000 users. However, customer numbers shrank in all regions except Asia. A minus is also expected for the coming quarter. “One reason is certainly the saturation of the market,” says Hans Kühberger, Managing Director of Ocilion in Ried: Ocilion supplies network operators, hospitals and hotels with its IPTV solutions. IPTV enables television via the Internet connection. With Sky, AppleTV, Amazon Prime, Hulu and Disney, to name just a few, a large number of providers are vying for the attention of customers. “But most households only have a certain budget available. Very few subscribe to five services. Then there is a pause.” In addition, users are always demanding new, high-quality productions – and that costs money: The production costs for the contract killer film “Gray Man” amounted to 200 million dollars. Here, for example, Amazon Prime, part of the world’s largest online retailer Amazon, has advantages.
How will the group proceed now?
In order to get growth going again, Netflix now wants to shake a taboo: “Advertising was previously a taboo subject, but now it’s being considered,” says Gerald Petz, head of the Marketing and E-Business course at Steyr University of Applied Sciences. Netflix boss Reed Hastings had long resisted, but is now open to a cheaper subscription with interspersed advertising.
What else is planned?
Free riders in particular are a thorn in the side of the streaming pioneer, i.e. those users who share their login data with people outside their home. 100 million households should consume without paying. They don’t want to ban this, but demand a higher fee for it. Netflix can use IP addresses to determine where users are accessing the service from. However, it will take another year for the system to be fully operational. Tests will initially be carried out in Chile, Peru and Costa Rica, the additional costs are the equivalent of two to three euros per household.
What does all this mean for the industry?
If you want to survive, you have to position yourself more broadly: Netflix recently took over three video game developers. Disney holds numerous sports rights and is considering entering the sports betting business. Kühberger also expects that there will be opportunities in the future to consume content from different providers via one channel.
Source: Nachrichten
