The rise of streaming platforms and the slow migration of audience members from traditional television and into the "watch what you want, when you want" model in the early 1990s, and Netflix () was the main character.
Netflix seemed to be the ultimate king of the hill for a while, the name you used when it came to the term "streaming service." But life comes at you fast.
This week, news broke that Netflix lost 200,000 worldwide subscribers, "significantly missing the Street consensus forecast of a 2.5 million gain, bringing the total number to 221.64 million."
This is the first increase in customers for the service. The company has announced that it will lose another 2 million worldwide net paid additions in the three months ending in June.
The stock price of the company has dropped by 35 percent.
What happened to us?
According to experts who follow the streaming industry, there are several factors outside the company's control, including inflation, which is forcing customers to lose money, and Netflix must cancel its service in Russia, resulting in a loss of 700,000 people.
According to an expert, Netflix's issues stem from two fundamental issues: increased competition in the streaming industry, and an outdated content strategy.
Netflix Has a Content Issue
In order to succeed, every streaming platform requires two key components.
It needs to have a robust catalog of material that will keep people watching after they've received the most recent buzz. You may also sign up for Netflix for "Russian Doll," or "Inventing Anna," but they'll stick around to "When Harry Met Sally," and maybe stream a season of "New Girl."
Not only is it imperative that a streaming site receives buzzworthy updates that encourage people to subscribe, at least for a month or two, so they may catch up on the latest programming that everyone is talking about.
"When audiences decide between streaming platforms that have similar quality content, a robust catalog is crucial. That said, if none of the content is culturally relevant, the catalog becomes less critical," says Tina Mulqueen, the CEO of Kindred PR & founder of.
"Think about how many people downloaded Apple+ so they could engage in conversation about 'Ted Lasso." More important is the importance of engaging in those conversations than a more extensive portfolio that fewer people were talking about.
Netflix was the master of the buzzy title that everyone had to check out for a while. However, between Apple+'s "Ted Lasso" () - and Disney+'s () world-conquering "The Mandalorian," other services have learned to play Netflix's game, presumably better.
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"We saw this clearly with Apple's Best Picture victory," says the author. "We had a first-mover advantage and changed the gaming landscape," she says.
AppleTV+ is the latest brand in technology.
Netflix Has A Catalog Problem
Don't overlook the importance of a good catalog, however, that said.
In 2008, when Netflix transitioned from a DVD-by-mail business to a streaming service, it began to establish a large audience on the back of other business's content. While Hulu and HBO Go () were around, so Sony, Warner, and Disney licensed their TV shows and films to the streaming service.
Over time, reruns of "The Office" and "Friends" became hugely popular with younger Millennials and Generation Z, including on Netflix, more often than any of the channel's original films.
A successful streaming network must balance consistently producing short-term hits with producing or acquiring content that is in demand year after year, and ensure they build a library of content that has the ability to keep people coming back to watch when it's recommended, said Keith Zubchevich. The CEO of Conviva, a continuous measurement analytics platform, has said.
In the end, the other major film and television studios realized that by licensing their material, they had created a substantial competitor, and it was just good business sense to build their own streaming services and restore their most popular titles, so "Friends" ended up on HBO Max and "The Office" on Peacock () -.
This put significant pressure on Netflix's initial production. When they lost so many content they used to syndicate, they had to pay the costs for their content catalog and accept the danger of being 'hit or miss. According to Zubchevich.
"It was a low-risk success seeing access to proven popular content (and lots of content already expanded the catalog quickly)," he adds, putting original content to a lot of risk, according to me. This affects the brand, catalog, and revenue."
