What’s next for Netflix?

With close to 150 million subscribers around the world, Netflix is a behemoth amongst streaming services, its limitless creativity cementing its success in the digital age.

Launched in August 1997, when the average internet speed was an unthinkable 56kbps, Netflix started out as a DVD rental service. Today, it’s home to 256,000 titles, streams in 190 countries, and earns $15.7 billion revenue annually.

As with any thriving tech firm, Netflix has continued to innovate its way to victory. As competitors such as Amazon and Hulu close in, not to mention new threats from other media companies, it’s time to evolve once again. So what’s next?

Out with the old

There was a resounding cheer from sitcom lovers everywhere when it was announced that Friends was coming to Netflix. No more taking a gamble on what series would be playing on other channels – just freedom to relive our favourite moments.

Despite only launching on UK Netflix in December 2017, and Netflix paying an eye-watering $100 million exclusivity deal with WarnerMedia, Friends on Netflix will soon be no more. As AT&T, the telecoms company that owns WarnerMedia, seeks to launch its own streaming service, there are rumours that 2019 could be Netflix and Friends’ last year together. Saddle up and watch those “pivot” moments while you can!

The lovable six could be following in the footsteps of The Office US, which left UK Netflix in 2015. Now, NBCUniversal, creators of The Office US, are also seeking to launch their own streaming platform, and they want to take Michael Scott with it. US fans have until 2021 to catch up on his shenanigans.

In with the new

Netflix’s seeming abandonment of sitcoms could lead subscribers to expect an increase in feature length films instead. This isn’t the reality however: in fact, movie titles on Netflix US dropped by a third between 2010 and 2018.

Original content

This is not to say that Netflix is abandoning film altogether – Bird Box, an original content film, was streamed to 45 million accounts. What it is saying, is that Netflix is investing far more heavily into original content than older classics such as Friends.

In 2018, the company spent $8 billion on original content, a budget that is set to more than double to $18 billion in years to come. This accounts for 25 per cent of the firm’s costs, and the gamble is paying off, with shows such as The Crown and Stranger Things striking a chord with viewers.

Big ideas

It’s not just series and movies that are taking off. Interactive content such as Black Mirror’s Bandersnatch created an immersive experience for viewers in 2018, with other hits such as Bear Grylls set to light up home cinemas.

And for that coffee table experience, Netflix is launching something completely different. This June, a new print magazine, Wide, will be released. It’s said that the publication will be free of charge, alerting readers to new titles coming up, and featuring interviews with actors. More importantly, the team at Netflix are hoping to catch the eye of television judges in time for the Emmy Awards. Watch this space.

Some ideas might not be as well-received as a Sunday afternoon read, however. Recent reports of “ads” appearing in between episodes of series have prompted complaints from some viewers, who argue that their subscription fee is enough. Netflix has claimed that these were simply previews for upcoming shows, and it is conducting experiments to show users relevant content while they watch.

New challenges

Of course, Netflix has far bigger fish to fry than a few disillusioned customers. Said fish come in the form of a slew of new streaming platforms. The services will not be a carbon copy of Netflix, though – AT&T, for example, will only offer titles from the WarnerMedia catalogue, categorised into three tiers.

Likewise, NBCUniversal, which will soon become known for taking back the most-watched TV show on Netflix, is launching a streaming service that sits alongside cable viewing. While many streaming services are encouraging consumers to “cut the cord” from traditional television, NBCUniversal’s approach is to drive revenue from ads, and offer free subscriptions to all its live television customers.

There is even a short video platform for mobile waiting in the wings. Whether or not it’s a worthy contender for Netflix’s boxset devotees, it does have a very worthy budget of $1 billion. Netflix investor Morris Mark would be wise to keep his eye on the incipient Quibi service.

Hakuna matata

But do these new threats worry the team at Netflix? Not in the slightest. Even perhaps the biggest contender, Disney, isn’t keeping Morris Mark up at night. Set to launch in November 2019, Disney+ will undercut Netflix’s current subscription prices at just $6.99 a month. Not only will it give parents unfettered access to hits from the Disney Studio, it will also show Marvel, LucasFilm and National Geographic titles, securing the adult market.

“Look at the entertainment market much more broadly defined … Disney+ is a drop in the bucket,” says Mark, who, conveniently, also owns shares in Disney. Analysts claim that Netflix offers a “much broader range of content”, and do not consider Disney+ a Netflix alternative.

Content is king?

Today, Netflix says its biggest concern is not competitors, but improving the experience for subscribers. Indeed, even CEO Reed Hastings says our “need for sleep” is Netflix’s biggest threat – but that’s not going to deter him from creating even more original content.

In the pipeline, we have a new series of Black Mirror, Stranger Things and Thirteen Reasons Why to look forward to. Netflix may be saying goodbye to some old favourites, but with these new innovations, it will continue to draw us in.

Stranger Things
Katie Lingo
by Katie Lingo
26th July 2019

Project Details

Client: SONA

Skills: Blogging

Date: 20th May 2019

View on client's site

Project Info

As part of an ongoing blogging retainer with my client, SONA, I produced a piece looking at the future of Netflix and home entertainment in general.