The once inflexible streaming giant is starting to reconsider a few things.
Netflix spent the ‘10s as a unicorn.
After slowly killing Blockbuster with its mail-order DVD rental service, it pioneered the idea of streaming television in 2008, and as they say, nothing has been the same since.
Eventually, television fans got used to watching entire seasons of shows, both new and comfort classics like “Parks And Recreation,” in one sitting, and the company made aggressive moves to develop its own library of television shows and films, as it became well-aware it wouldn’t have access to catalog shows like “The Office” and “Friends” forever.
For a while, it seemed like Netflix (NFLX) – Get Netflix Inc. Report couldn’t stop growing. It also seemed like it couldn’t stop spending money on content.
Sometimes, that content was visionary films like “The Irishman,” or era-defining hits like “Stranger Things.” And a lot of the time, that content was… just kind of there, neither great nor terrible, just something the streamer put up so you won’t notice that now HBO Max (WBD) – Get Warner Bros. Discovery Inc. Report has “Friends” and all the Batman films.
The problem is that quantity is no substitute for quality, and eventually the sheer glut of Netflix made people begin to tune out, just as other companies began aggressively entering the streaming market.
Nothing lasts forever, and Unicorns don’t really exist. Netflix had a great run as the king of streaming, and it still boasts the most worldwide subscribers at 220.67 million, even if Disney (DIS) – Get The Walt Disney Company Report expects that its streaming service Disney+ will take the title by the middle of this decade.
After hitting what may not come to be viewed as its natural ceiling of subscriber numbers during the pandemic, Netflix has begun losing subscribers this year, and it has laid off 450 employees this year while seeing its stock value tumble.
In response, the once invincible, and arguably inflexible, streaming giant has begun signaling that maybe it needs to rethink a few things, including, perhaps, one of its defining features.
Netflix Contemplates Dumping This
Netflix co-founder Reed Hastings is considering moving away from its standard model of releasing new seasons of television all at once, as revealed in a profile by Puck News.
That model has more or less been Netflix’s standard move since it first began making its own television programs in 2012 with the show “Lilyhammer,” and really began getting noticed with “Orange is the New Black,” and “House of Cards” in 2013.
When rival streaming services began chasing Netflix’s audience, they tried different approaches. Disney generally sticks to a weekly drop schedule for its Star Wars shows like “The Mandalorian” or its Marvel shows like “Moon Knight.”
Hulu tends to premiere new seasons of popular seasons of popular shows like “The Handmaid’s Tale” by releasing a few episodes at once, and then switching back to a week-to-week model. while Amazon recently shifted strategies for its Emmy-winning drama “The Marvelous Mrs. Maisel,” which used to drop all at once, but this year released two episodes a week. (Though both companies have still used the all-at-once model occasionally, mainly for smaller-scale dramas like “The Bear” and “As We See It.”)
The argument that many critics had against the all-at-once drop is that subscribers might watch an entire season in a week, and then will stop talking about it, which means a drastic decline in all-important social media and critical chatter.
Every streaming service lives in fear of subscriber churn, which is the practice of canceling a plan once you’ve watched the entire season of whatever show you signed up for, only to switch to a different service in the next month. In theory, stringing along a TV show over several months could potentially reduce churn. Earlier this summer, Netflix split its highly anticipated new season of “Stranger Things,” into two parts, though that was partly, it seems, as a way to goose ratings.
The profile notes that “Netflix says there’s no hard evidence that week-to-week episodes reduce subscriber churn, but the Netflix churn rate has been inching higher, and it is now the only streamer with a default all-at-once strategy,” and is now considering switching up its approach.
Disney
Netflix Has Been Doing a Lot Of Rethinking Lately
Possibly moving away from its all-at-once strategy isn’t the once-unthinkable change Netflix has signaled that it’s open to, as it finds out ways to adapt to the new streaming marketplace.
After spending the second half of the ‘10s in a spending war to become the first streaming service with an Oscar-winning film, only to lose to Apple’s “Coda,” this year, the company has indicated it will be much more selective with the films it spends money on, as the days of blank checks to auteurs is at an end.
And after years of insisting that Netflix will never accept advertising, as a way to both drive revenue and offer an ad-supported, cheaper tier, Netflix has now indicated it is in the planning stages of offering such a plan, though plenty of details, such as the exact price or the launching date, are still unknown.
