For the first time in ten years, Netflix sees its progress drastically slowed down. The platform may have found the solution to the problem.
For many years, Netflix had plenty of time to establish itself as the platform SVOD reference. Without real competition, and with an offensive strategy, the firm of Reed Hastings seduced by less than 222 million users paid around the world. Excellent results for the sector leader, which must now face other offers of its kind to hope to keep its place on the market.
While Disney+Amazon and HBO Max are jostling to climb the ladder, the red N is losing momentum. In its last quarterly report, the company admitted that it had not met its growth objectives and had therefore lowered its expectations for the coming months. Obviously, this was not enough since it accuses for the first time in ten years, a loss of users. In the United States, approximately 600,000 households have canceled their subscription.
This disenchantment with the platform in the United States would be closely linked to the price increase recorded in the country a few months earlier. Netflix must also face the consequences of its boycott in Russia and thus pass of 700,000 users. Result of the operation: the platform lost 200,000 subscribers in just a few months.
A lighter version
Netflix seems to have integrated that the prices of its offer can be prohibitive for many households. The platform is therefore working on a lighter version of its offer. If the catalog will stay the same, it is through advertising that Netflix hopes to make its revenue. LikeHBO Max and Disney, le N rouge is working on a low-cost version of its formula. The goal is simple: lower the bill in exchange for a few pages of advertising. According to information from New York Timesthis subscription could be offered from the end of 2022. On the other hand, it is to be expected that only a few markets will be affected in the first place, before an international deployment in the following months.
This is still good news for Netflix subscribers, who view the successive increases in supply with a very dim view. It must be said that the platform is currently the most expensive on the market. So when it comes to accounting for the monthly bill, Netflix is undoubtedly in a weak position.
A new Eldorado for brands
In addition to being an opportunity for Netflix to attract a less affluent audience into its nets, this offer, supported by advertising, is also a golden opportunity for brands and advertisers. While many turn to TikTok to promote their products, Netflix with its 221 million subscribers is also a destination of choice. Netflix should have no trouble convincing them.