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What’s the Future of Netflix?

What’s the Future of Netflix?

Technology

From the House of the Cards in 2013 to the Squid Game, the most popular series in 2021 which gains 1.65 billion hours of watch by subscribers in its first 28 days, Netflix has already been the world’s largest streaming media player and one of the most popular video sites in the U.S.

With the continuing popularity of the videos and the live streaming on the internet, there are several models such as user-generated content such as YouTube and professionally produced content such as Hulu which is owned by The Walt Disney Company and NBC Universal.  Netflix has its models based on video content and its main businesses are rental of movies and streaming services. So what is Streaming media? And how it works. 

Streaming media refers to a series of audio and video files compressed and transmitted through the network in sections. With this technology, data packets can move like water over the Internet instantly. Streaming technology eliminated the need for people to download multimedia content to their local computers and wait for the multimedia content to fully download before they could enjoy it. From traditional video surveillance to the popular live stream and online videos, the streaming media and streaming services have largely changed people’s lives. 

The competition in the streaming media is fierce during the pandemic and after the pandemic. The pandemic brought opportunities for the streaming media because people were more willing to stay home and spend more time on those streaming media. However, Disney, NBC Universal, Hulu, Amazon Prime Video, Apple TV+, and other rival streamers had pressure on Netflix and the number of subscribers of Netflix. The merging of HBO Max and Discovery+ also caused Netflix to lose content and put pressure on Netflix to continue creating unique content to compete with these competitors. 

Netflix started to increase the subscription prices in the US and Canada at the beginning of 2022. In addition, the Russia and Ukraine war and the inflation also had a negative influence on the market share of Netflix. Netflix has lost lots of market shares during this year. Netflix lost 2 million subscribers in the first quarter of 2022 and kept losing nearly 1 million subscribers in the second quarter of the year. The stock price of Netflix has decreased 59.42% compared with last year and decreased 42.43% within the last 6 months. 

In response to the poor performance this year, Netflix will have a new lower-priced ad-supported subscription plan with more affordable prices that cost $9.99 to $19.99. This new plan will be tested in early 2023 so it might not have that great influence on the performance of Netflix in the following months. In addition, lots of the competitors of Netflix such as  Hulu, and HBO may also have low price plans so whether the new plan Netflix will have a significant positive influence is unknown. Although Netflix is still the largest global streaming media in the market and was the most promising one for these years, at that time, it may not be an ideal buy option for investors.

Written by Yue Zhang

Technology

What’s the Future of Netflix?