Netflix should press pause on blaming users for subscription slump
In the old days there was TV and it was good until it wasn’t. A combination of high prices and limited content drove users to on-demand platforms providing a flexible, legal alternative to cable and file sharing/torrenting. I remember the excitement surrounding the arrival of Netflix to Ireland in 2012. At the launch I interviewed CEO Reed Hastings and his message was simple: Netflix provides a good service at a fair price point. Part of maintaining low prices came at the expense of content. In UK & I, we paid the same as our US counterparts (there or thereabouts) only for significantly less content as the combined market did not sustain the same level of investment in licensing. Still, I was assured things would get better over time and that original content would make up the difference in catalogue size for quality.
Since then we’ve seen the evolution of the Netflix strategy to lean in to audience growth not through price but content, from prestige productions like The Crown, Stranger Things, and Bridgerton and Oscar-winning films like American Factory and Power of the Dog, to lurid true crime documentary series like Tiger King and Making a Murderer.
Original content, however, does not come cheap and we have seen a steady increase in prices from €7.99 for a standard plan all those years ago to €14.99 that includes HD content viewable on four devices at the same time. Still, brand loyalty and pandemic-induced boredom haven’t been a problem for Netflix as user figures continued an upward trend. Now the streaming giant’s fortunes are taking a turn. Results released Tuesday showed the company had lost 200,000 US customers in the first quarter of 2022. It’s a staggering figure but one that can’t have been unexpected. People are getting back to the office, the price of living is going up and a new wave of competitors from Disney+ to Peacock have shrank the market and fragmented it. But according to Netflix something else is also going on: people are sharing passwords to their accounts, reducing the number of people interested in using their service. According to their ToS customers are ‘illegally’ sharing content.
So Netflix is buying into the old TV argument that content shared is money directly out of their pockets instead of an indicator that what you’re offering isn’t worth paying full price. Having ditched TV entirely for a small number of streaming services, Netflix is making less sense to me as a proposition. My regular scrolls through the catalogue reveal a clutch of five star films surrounded by barely passable fare and anaemic sections for horror, sci-fi and classics. As for original content I have my pick of South Korean teen dramas and stand-up specials. ‘New content’ is rarely actually new, just new to Netflix and probably coming to a terrestrial screen near you, if it hasn’t already.
If you had put this in front of me in 2012 I would have kept my money in my pocket. You can blame the price hikes on Netflix seeing the end of its growth phase. The market is saturated, and the competition is coming in at cheaper price points. But no, it’s the user that’s at fault.
I won’t be ditching my Netflix subscription this month but I’m fast running out of viewing material. In fact, I’ve gone back to watching DVD box sets as too much quality TV has passed me by. I’m pretty much lurking back to my pre-streaming viewing pattern. So come on Netflix, press pause on the accusations and look at where you’re going wrong. You provided a solution before, you can do it again.