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Netflix and Chill

As the sunny days in Amsterdam are slowly drifting away (in case you were lucky to see those), the demand for a comforting cup of hot chocolate and a nice evening watch is on the rise. In case you are the kind of person that freerides on your friend’s Netflix account, the Apple-TV launch may trigger your attention. 

On the 11th of September not only, the new iPhone was introduced, but also something far more interesting that made Netflix stock owners see it’s sniffer. The new TV platform by Apple was released. While Jason Momoa shined with his torso (long time no see Khal Drogo) in the trailer to the TV-series called “See” (available only for Apple-TV users), Apple promised a year-long free subscription to the owners of their fresh gadgets. So, watch out if your Netflix buddy bought an iPhone, as your excess to the pipe of free movies can disappear. Moreover, the new market player of the online streaming platforms tries to undercut its competitor with a subscription of only 4.99$ a month. This is a strong statement compared with the Netflix subscription that ranges in price from 7.99$ to 13.99$ a month. Moreover, Apple is not the only one to compete with Netflix. There are more players such as good old HBO, Amazon Prime, and Disney which will launch its streaming platform on November 12th. 

Monthly Subscription Plans for Different Platforms

But this is only the beginning of Netflix’s troubles. Another threat is the so-called streaming wars. Media-service providers find a new way to attract the attention of the customers with a variety of TV-series. Enjoy The Big Bang Theory and Friends on Netflix as much as you can, cause these two jewels are like a hot kroket that everyone wants to take a bite of. According to Financial Times, AT&T owner of the HBO has sealed the deal for the US streaming rights to The Big Bang Theory for its upcoming HBO Max service. The five-year deal is worth approximately 500 million dollars. Moreover, the new star-studded series The Morning Show, featuring Jennifer Aniston, Reese Witherspoon, and Steve Carell, was sold to Apple. Netflix made its bid on it too but lost to Apple because the series will be a hot new TV-series on Apple’s platform, instead of one of the many.

As the subscription war is only yet to unravel, Netflix already hasn’t met its quarterly prediction for subscriber growth in the US, facing a dramatic drop in June. According to the Financial Times, Netflix lost 126,000 subscribers that month. This dramatic fall in the second quarter has brought doubt over the company’s invincibility. 

For years Netflix has invested a lot of its revenue in the creation of content to attract users and increase market capitalization, and it worked. But is it smart to invest 75 cents on the content creation on every dollar earned? How will it affect company performance in the long run? Such a way of distributing revenues can negatively display on investors as they want to get higher revenues from their investment, instead, they get only a quarter of it. As Netflix fight for customers, it will soon have to fight for investors too. 

Daily Adjusted Close Stock Prices Over the Six Month Period

So, what does it mean for regular users? First of all, as we know from economics 101, more market players mean subscription prices go down to attract customers. This can already be seen with Netflix’s introduction of the cheaper subscription offers. Secondly, the question is how to make a customer stick to your platform. That is where the wars for streaming rights and content creation comes in. The popularity of TV show attracts more viewers, as we know a lot of top-ranked TV-shows last for years. For example, even if you never watched Game of Thrones you for sure at least heard of it, and maybe even know that it is the HBO TV-series or you even know when its last season was coming out because some of your friends brag about it. This is brand recognition, like Stranger Things, is from Netflix, Marvel and Star Was TV-series are part of Disney now. It’s up to you what to watch, the attractiveness of the platform is based on its content, so the more of the cool TV-series and “fresh” movies it has the better it is for gaining customers. 

Being a TV-series fan myself, it’s quite hard to catch up with every good one out there. Even though the price for streaming platforms is decreasing; it is still going to be a painful hole in my bank account if I want to subscribe to two platforms instead of one. I could share my subscriptions with friends and split costs. Moreover, based on my research I found out that for example on Amazon Prime I can rent out to watch a TV-series. But guess what, to watch at least two seasons would cost me more than a monthly subscription. Smart cookies, they know how to get customers on the hook. But what if instead of messing around with friends and be confused who pays whom there will be a company who will deal with those questions? For example, it can charge you based on the hours you watch or only TV-series that you choose to watch from the different platforms. What do you think of this matter? How do you think those streaming platforms will develop? Leave a comment below I will be happy to hear your ideas. 


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