The information on Netflix’s results for the first quarter of 2022 was received with surprise. It turned out that the largest of the streaming platforms, paving the way for later services, recorded a loss of 200,000. subscribers compared to the result for 2021 We make a diagnosis – the reasons for the decline vary, but most of all Netflix is starting to give up the values for which we liked it.
Netflix family – we are all from one account
Once upon a time, watching a coveted movie was associated with a trip to a physical rental shop. Those magical times are gone, although here and there you can still find a shrine that fights against the prevailing fashion. However, little can compare to the convenience of an extensive library of titles available in one click and with a subscription fee. It was Netflix that taught us this convenience, and part of it made the possibility of sharing an account with family and friends. However, the company is taking an amazing direction in this regard.
Still from Red Notice, Netflix 2021
According to statistics, about 100 million subscribers are shared accounts. The messages sent from the Netflix website represent this fact unfavorably – after all, if everyone paid for using the giant’s offer, the profits would be greater. Agreed, but the available packages themselves impose the need to share Netflix, because in the case of the lowest rate (PLN 29), we have to be satisfied with the SD image quality. 4K / HDR is available only in the option for PLN 60 with the possibility of watching simultaneously on four different screens. If we translate the screens into people, subscribing with friends is a more profitable solution. Well, unless Netflix really wants each of us to pay the highest amount?
The plans include a new – probably the cheapest – package with advertising, which may turn out to be an even worse option than the one with SD image quality. In other words, Netflix would continue to push its users towards account sharing. There are also restrictions whereby only residents of the same household could use one subscription. This could already increase the number of individual subscribers, but at the same time it is quite a risky step – because what if viewers simply quit Netflix? Another idea, the extra charge for shared accounts, also looks uninviting.
It cannot be ignored that the streaming giant has recently gained serious rivals who also regularly enrich their offer – which translates into a fight for various licenses. A few years ago, Marvel’s series were hosted on Netflix (moreover, they were produced for him, like Daredevil if Punisher)today their home is Disney +. Friends they wander from place to place, and at the time of writing, we can watch them HBO Max. Everyone is armed as much as they can, and the cost-effective competitors are more affordable than Netflix – for example, a Disney + subscription is to cost PLN 28.99 per month and guarantee access to high-quality video, as well as allow viewing on several screens at the same time.
In a spiral of similarities – Netflix prefers safe designs
Netflix’s algorithms are supposed to lead him to success, but they may prove to be the nail in the coffin. This is part of the larger and, in fact, the most serious problem of the platform – striving to please the masses and blind faith in statistics kill the chance for development. This is the case of animations whose creators have to deal more often with the requirements imposed by hard data – allegedly reading viewers’ expectations.
Once upon a time, Netflix was home to creative producers. For the record – it still is to some extent, high quality movies and series are still being made for this platform. But the message from former employees is that Netflix wants to invest in what pays off according to algorithms. This means less space for risky and groundbreaking projects that may surprise viewers, become classics in the future, and maybe even sensational hits.. Netflix starts saying “No” to this approach – not very loud yet, and not always, but still. That is why the creative director of the animation department – Phil Rynda – was fired and some of the projects under development were canceled, including Gnata (an adaptation of the Jeff Smith comic book series).
Still from the Witcher series, Netflix 2019
The situation is best expressed by the change in Netflix’s motto, also regarding the aforementioned segment of films and animated series. It used to be like: “We want to be home to all your favorite productions.” Today, the words are completely different: “We want to create what our viewers want to see.” At the same time, this desire is determined by the algorithm – which can flood us with similar titles. There is an interesting phenomenon at work here, because some of the items (we underline: not all of them!) are characterized by similar aesthetics. Netflix leads to the unification of certain standards (e.g. related to the color of the image)thanks to which we can consume productions without the need to devote our full attention to them. What’s more, it is supposed to create the impression that the next proposal will be similar to the already watched product, and since it is similar, it will probably also fit our tastes – such an unconscious manipulation.
As a consequence, together with Netfliks, we can fall into a spiral of similar productions, created according to computer data and marketing recommendations. Anyway, the command algorithm will not take the risk of suggesting a movie or series that could broaden the viewer’s horizons. It is true that the latter is even understandable, but it can complete the destiny of drowning in the sea of mediocrity – with which Netflix is already becoming associated. However, you have to give back to the company that so far it still produces both good titles and big hits, even if the latter are not necessarily liked by everyone (such as The witcher with many critics in Poland). The positive effects are certainly brought by diversifying the offer with titles implemented in different countries. Korean Squid Game after all, it turned out to be an international success.
Still from the Stranger Things series, Netflix 2016
Elizabeth Ito, the creator of the animated series, spoke about the algorithm determining the projects City of Ghosts. The artist drew attention to the company’s attachment to data – with the help of which it is impossible to evaluate art. Here, however, a new thread appears, because According to Ito, Netflix not only relies on data, but also manipulates it. With their help, justifying the cancellation of a given production or failure to guarantee its appropriate promotion, necessary for it to stand out. As a result, the creators leave. Ito has found a new job at Apple.
Quo vadis, Netflix?
The war in Ukraine should also be added to the reasons for the decline in subscribers. It was because of her that Netflix suspended its operations in Russia, which meant it lost 700,000. cont. The pandemic also had an impact – at first favoring the platform, because during the lockdown we had to sit at home and look for spending time on the streaming platform, among others. Now, however, we have already returned to the previous lifestyle, and this certainly had an impact on Netflix’s statistics. In addition, COVID-19 has led to production downtime, which is why the continuation of hits such as Stranger Things were delayed. Some subscribers may have temporarily stopped paying for the service while waiting for their favorite titles to return.
The situation is multifaceted, but I’m afraid Netflix won’t draw the right conclusions from losing subscribers. This is evidenced by the ideas of introducing advertisements or restrictions on account sharing. The chosen direction may of course bring a profit for the company, but rather in the short term. Sooner or later, subsequent changes for the worse may result in an outflow of users to the increasingly powerful competing platforms. Hopefully Netflix will wake up in time or at the right times will be able to throw the algorithm to the devil and bet on risky projects.