Netflix’s easy growth is over
The times when Netflix was the pretty girl of users and investors has ended. If anyone had doubts, now the signs are unmistakable. First and most obvious indicator is its stock price, which looks like this:
In October 2021, Netflix reached $690 per share after a true two-year rally where multiplied by 2.5 times its value. The pandemic and the confinement policies catapulted the last stretch, due to the enormous free time that users had and that they dedicated to the platform. But that’s over.
The end of the restrictions was followed by a stagnation of user growth first and a contraction after that we are looking at 2022. Investors know that and that is why there has been a massive stampede of this value. In three months, Netflix lost 270 dollars of trading on its peak. And since the beginning of the year so far, he’s lost another $220.
The easy growth of Netflix is behind us. For this reason, the company has launched a plan to squeeze your users current.
It’s time to milk the Netflix cow
As we said in April, there are two great forces converging to complicate Netflix’s life. The increase in income via new subscribers has ceased. Apparently, the number of users attracted by Netflix’s offer has reached a very high level of penetration. Barring major changes in the socioeconomic conditions of its potential markets (improved standard of living), Netflix would only have one way to go to increase revenue: get more money from its existing users.
This can be achieved by raising the monthly price of the Netflix subscription, which they have been doing on a regular basis in recent years. But also for another: prevent sharing Netflix accounts. Or, more specifically, that sharing is not free for users. That’s the plan they announced long ago and that they have begun to test. In some countries they are charging more for using the account in another house, an extra fee that in Argentina means paying 50% more per month for having several active “houses” in one account (the price ranges from 3.30 euros per month for the basic rate and an extra 1.70 euros for the additional house).
Another big front Netflix is exploring is creating a cheap subscription with ads. For it, have partnered with Microsoft and with this they seek to offer more plans to users at attractive price points. The theory is to try to attract new subscribers, although its value will not be the same as the rest. But that is another matter.
The freedom of Apple TV + and the support of an entire ecosystem
Netflix is a company that has a single business: creating interesting content to retain subscribers that it captures with different rates or offers. We could interpret these latest Netflix ads like that of the farmer who wants to milk his cow to the last drop. And in a certain way it is like that, as we are seeing.
Time is short for Netflix, because the strong grip it once had when it came to finding good stories to tell it’s not that firm. The competition has been reorganized and merged, presenting a new battle when it comes to acquiring talent and content. And that has triggered the prices and intensity of the bids, increasing the costs of Netflix.
Apple TV + has to do with this. Many have ridiculed Apple’s streaming service for not having thousands of titles in the closet. It’s already been three years since debut of this service and, although its catalog is still small, it has not stopped growing. Not only in quantity but also in quality. Last year, Ted Lasso took four Emmys, at the beginning of this 2022, CODA won the Oscar for best picture. And just a few days ago, Apple TV+ was showered with nominations for the 2022 Emmy Awards.
All of them are series, movies and documentaries that for the most part could have ended up in the Netflix catalog. And yet, they are on Apple TV +. Apple TV+ Strategy It has been based on leaning on the Apple ecosystem so as not to be harassed by the balance of finances, income and expenses. That same ecosystem has allowed it to have a huge showcase from which to attract users, supplemented by the free trial period that we saw at the beginning of the service.
The result is a different service from those offered on the market, where Apple TV+ releases come slowly but steadily. Few stories, but very well chosen. It is not an ideal service for a devourer of series, but it is for someone who has little time to entertain themselves and, above all, cannot afford to waste it looking for new series or movies. As a user, I have rarely entered without knowing what to see and have not ended up watching a series that I liked. All of them I have finished seeing, except Mr. Corman. And I liked all of them, except Suspects. Of course, this path chosen by Apple is the most appropriate considering its strengths and weaknesses.
In Applesphere | These are the five best Apple TV + series that I would never unsubscribe for (as long as they exist).