Last month the news broke that for the first time in eight years Netflix lost paid subscribers in the United States. For a company that created a multi-billion dollar marketplace out of the lost and misfit IP of others, the public was quick to (over)react to the news, with stock prices dropping roughly ten percent and many a media outlets including Forbes, The Hollywood Reporter, Yahoo Finance and CNBC calling the scenario nothing short of a disaster.
Fast forward one month later and the predictions have not gotten any rosier. First, we now have more details about the upcoming Disney + streaming platform including their cost saving bundle if you subscribe to Hulu and ESPN + as well. And secondly Apple has released the first trailer for their first major production, The Morning Show – which looks incredible.
So is this the end of times for Netflix?
Yes and no.
The Netflix you first signed up for back in the day will likely not look like the Netflix of the future. Namely you’ll see a lot less other brands and a lot more Netflix Originals. Some of those loses will hurt more than others.
For instance after deciding to pay $100 million dollars to keep Friends online for another year, Netflix will lose the classic sitcom to WarnerMedia’s streaming platform coming in spring of 2020 and The Office, to NBCUniversal’s streaming platform also coming in 2020.
Want to guess what the two most streamed shows on Netflix were last year?
If you answered Friends and The Office congratulations you are a winner! Be sure to collect your $200 as you pass go.
In fact none of the top nine streamed shows in 2018 for Netflix are Netflix originals, two are owned by NBC, three by Warner Media, two by CBS, one by ABC and one by Fox. Meaning ALL 9 of the most streamed shows on Netflix could be leaving the platform in the foreseeable future to a different streaming platform. Which (if you are following along at home) is not great.
Now the good news is that people are watching more Netflix Original programming than ever before. Netflix Original streams tripled from January of 2017 to October of 2018, now accounting for 37% of all Netflix streams.
So popular shows are leaving but more people are watching originals than before… is Netflix okay or not? Okay – I see your point let’s try a different way to break this down.
*WARNING: incoming sports metaphor*
Think of the wave of upcoming streaming platforms as a sports league expansion. Netflix is about to lose their two star players to free agency and they are back filling the roster spots with their cache of talent waiting in the minor leagues. While unproven and not scrutinized under the lime light yet there’s no reason the new players couldn’t help Netflix have a great year but everyone is acutely aware of the big shoes they are trying to fill.
At the same time with more teams coming onboard the star talent that used to be consolidated to one or two rosters now will be much thinner across the board. Turning what used to be one or two super teams into a well balanced league.
An influx of new players in the streaming game will help lead to parity and a rising tide of competition will lift all platforms to a higher level.
As a consumer it will be more difficult to see everything in a fragmented marketplace but there will be more to see everywhere you look. Hopefully that means everyone will be able to find something they love no matter where they are looking. Now granted, with everyone spending billions of dollars on churning out content, not everything will be the next Stranger Things or The Wire and in the defense of the streaming companies, not everything from the 90’s or 2000’s reached the heights of Friends or The Office either. The reason those two broke through the plateau of meh is the same reason they still resonate with streamers today as they did with viewers way back when. They are just really good television shows.
Netflix knew the day would come when they would not be the only ones in the streaming space. They have been preparing for this since the first Netflix Original, House of Cards, hit the internet back in 2013, and more recently by locking up major television and media players like Shonda Rhimes and Ryan Murphy to help keep Netflix Originals competitive with the marketplace.
The upcoming changes are more indicative of the shifting streaming landscape than anything particular to Netflix alone. Today to watch Mindhunter, Moana, The Office and Friends all you need is one app. By the end of 2020 you will need four apps to accomplish that same feat and that is going to take some getting used to.
So yes of course it will hurt Netflix to lose their two most popular shows and yes a more crowded marketplace means there with naturally be customer churn with more options to choose from – but Netflix is here to stay.