Netflix’s plummeting share price reflects a problem and it’s not the shared accounts or the price: it’s the content
They must not be having a good time at the Netflix offices: the announcement in the Q1 2022 earnings report that they have lost 200,000 subscribers for the first time in a decade has led to a tremendous stock market plunge of about 25% in the value of their stock. Netflix has already initiated a couple of emergency plans. First, with a battery of cheaper ad-supported subscriptions. Second, by putting an end to the unlimited account sharing bargain.
Family subscriptions with four simultaneous connections have long been a real bargain because of the laxity with which Netflix allowed millions of users to share accounts outside the primary subscriber’s home. The number: more than 100 million households are watching Netflix without paying what they should (30 million in the US and Canada, according to Variety).
But it seems that this problem, already mentioned by Netflix itself, is only the tip of the iceberg: there is a clear problem of image of the company itself, against which its own strategy of being the one that launches the most, all the time, continuously, has played against it. Its overwhelming release schedule, which in 2020 led it to release 79 movies a month (and has not slowed down since then) has ended up imposing the widespread belief, confirmed by the evidence, that not everything is of the same quality.
It doesn’t matter that Netflix has openly declared that it is going to focus on improving the quality of its releases. It doesn’t matter that for some time now the platform has made an effort to be more transparent with its viewing figures, leaving behind the confusing criterion that a couple of minutes was enough to count as a full viewing. Because there may be some widespread feeling that Netflix is a content churner, where quantity takes precedence over quality.
Big movie franchises
The point is that things have changed with respect to the times in which Netflix announced that volume of releases. For starters, the most obvious one: competition. Although at the moment no one is overshadowing the platform’s huge number of subscribers, Disney+ and HBO Max are not only on its heels in terms of number of subscribers. Their catalogs are tremendously competitive: Disney+ has Pixar, Marvel and Star Wars, plus its dean’s arsenal of productions and franchises. And in HBO Max, Warner is one of the few remaining production companies dedicated to blockbuster movies (there are ‘Dune’ and ‘The Batman’ to corroborate this) and has the entire DC heroes catalog, in addition to the television prestige of HBO.
And the rest are also stepping on the gas. Just yesterday Prime Video announced that it will simultaneously release the entire Bond franchise with the arrival of May, and the strength of catalog background that gives it the acquisition of MGM is not negligible. Against all this, Netflix is running out of million-dollar franchises (perhaps the transfer to Disney+ of the series with Marvel characters that it treasured until recently and that gave it so much prestige and success years ago is the perfect symbol of the end of an era).
Netflix has a few powerful and genuinely its own properties left, such as ‘Stranger Things’, ‘The Crown’, ‘The House of Paper’ or ‘The Bridgertons’. Their attempts to open franchises in feature film format, such as ‘Red Alert’ meet (they claim) with the support of the public, but except for exceptional cases like ‘Roma’ or ‘The Irishman’, they don’t completely get rid of their airs of TV-movies on steroids. These are not their only successes, but with many others, such as ‘Arcane’ or ‘El juego del calamar’, the idea of surprise success, of hits that catch the platform itself by surprise, prevails.
The situation is rounded off with a controversial topic that is not often talked about, but is part of Netflix’s DNA: binge-watching, the appearance of entire seasons on the same day of release. It is a tactic that facilitates massive conversation at first, but that soon leads to the viewer’s attention going in another direction. Just compare how Disney+’s Marvel series or HBO Max’s most eye-catching premieres perform compared to the exhausting avalanche of tweets generated by Netflix series… the first weekend.
Binge-watching reinforces that idea of “content dump, regardless of its quality”, and that almost all of its competitors have been abandoning. It is easy to compare with, perhaps, the platform whose perception is diametrically opposed: Apple TV+. Whether its series are liked more or less, their technical finish and the feeling that they come out when they are finished and not to cover a demanding calendar of constant premieres gives the platform a very different prestige. Its latest big premiere, ‘Severance’, has benefited from those weekly releases: not only has it benefited the pace and development of the story, but it has been massively talked about twice, in its surprise premiere and at the season’s conclusion, nine weeks apart.
Netflix shared accounts.
The only thing that remains to be seen is whether the limitations on split accounts are going to improve Netflix’s situation or make the situation worse. Because it’s going to force many subscribers to consider whether they really care about Netflix content. Now a lot of people who watch Netflix because they have it thanks to a friend or family member who subscribes will be forced to take the step of subscribing or choosing which platform they are actually more interested in.
One way or the other, it’s a leap into the void for Netflix, which is too mired in the vicious cycle of its own programming (it can’t now eliminate binge-watching, or halve the pace of premieres) to flinch. Netflix has to remain Netflix, but with the ban on shared accounts? will that be enough?