Netflix – Streaming’s First Success Story
Gone are the days when a family would plan their weekend movie night days in advance where a family trip to Blockbuster would be the highlight of most people’s weekends. Now, I can admit even I cannot remember these occasions due to my age, however, all I remember in terms of film nights are DVDs… but even then, that form of content seems ancient.
My first ever memories of ‘on-demand’ films are ordering and renting DVDs from LoveFilm or watching all the different channels on Sky TV such as Sky Cinema and recording them for later, it was a revolution.
Essentially, Netflix had zero competition when it first started its streaming service in 2007. As Henry Ford said, customers do not know what they want until you show them, as most people at this time would not have suggested such a revolutionary service. They offered a whole new way of watching TV, monthly subscription-based, with no adverts and you can watch any film or show whenever you want and watch as many as you want. This sense of freedom was so appealing to customers as they have never felt it before, as they grew in subscribers every year for over ten years, currently sitting at 222 million subscribers as of April 2022.
There was not a particularly great selection of films and shows right at the beginning, certainly compared to the breadth and variety of content currently on the platform. However, when the company bought the rights to show hit TV programmes such as Breaking Bad and Prison Break, they noticed a large increase in global subscribers, particularly in the UK as they offered easy access to these shows that were previously only available in America or by purchase on box set which would average about 3x the price of a monthly subscription, at least.
Alongside these shows benefitting the popularity of these shows, ‘Netflix Originals’ were born. TV programmes and films that are exclusive only shown by Netflix, have served as the unique selling point for the service due to the exclusivity creating a sense of price inelasticity and them knowing that customers can’t watch this content elsewhere will only benefit them. Some of the main hit shows in English are blockbuster hits like Stranger Things, Sex Education, The Crown, and the Queen’s Gambit. And our poll has proven that 60% of you prefer to watch Netflix Originals to other programmes on the platform.
But the Netflix Originals do not limit themselves to only one language, alongside their global content purchased from other channels, they have made originals such as Narcos, Squid Game, and Money Heist which bring a whole new global audience to watch their content. It has helped bring shows to people’s living rooms that they never would have dreamed to watch, let alone know how to find. Because how many English and Americans could have said they had watched much Korean TV, let alone binge it, as Squid Game is now the most-watched series in Netflix history globally, which would have been unheard of before the days of streaming services.
In terms of marketing, Netflix has a normal functioning strategy, lots of social media push, to reinforce their popularity with their target audience, and their admins on Twitter, Instagram etc. all have the same tone as lots of brands in this day in age. Brands such as Duolingo and Ryan Air all receive great social media attention for having more of a personality rather than being a robotic, traditional brands such as the BBC for example.
In recent years, after Netflix practically had a monopoly in the market for several years, competition in the names of Disney Plus and Amazon Prime has surfaced. They both offer different price points, exclusives, and services to entice customers. Disney Plus we have already done a blog on (which you should read), but they have exclusive deals with Marvel, Star Wars, and family favourites such as The Simpsons, all while having access to all Disney and Pixar content. Amazon Prime not only offers a huge variety of content to watch but also includes their next-day delivery service for Amazon.com and has begun to start streaming a couple of Premier League matchdays a season. However, Netflix still boasts the most global subscribers for their service, and in our poll, 75% of you rate it as your favourite streaming service, compared to 17% for Disney Plus and 8% for Amazon Prime.
However, Disney Plus is the fastest-growing streaming platform, and Amazon Prime is growing in subscribers year on year. This is impressive compared to Netflix as increasing prices, removal of hit shows and rumours of the introduction of adverts in between shows have all led to the company losing 200,000 subscribers in Q1 of 2022, and they are projected to lose a whopping further two million subscribers in the second quarter of the year. Many business-minded people online have taken to social media to explain their theories, with a common one being that they have simply peaked the number of people willing to subscribe, rather than people becoming interested, and this will only grow again when the younger generation can afford/be old enough to subscribe. And certain cynics discuss how people share accounts to save on costs and the removal of hit shows has been the final straw for these dissatisfied customers.
On the contrary, Netflix is the staple of movie and TV streaming services, it is simply a household name, and is compatible with nearly every smart device, with most TV remotes having a Netflix button, it will be nearly impossible for them to lose the hold they have on the market.
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