Chances are you’ve already seen the plethora of articles surrounding Netflix’s drop in share value and subscribers but in case you haven’t then, in a nutshell, according to Teh Interwebz Netflix is dead. A loss of subscribers for the first time in 5 years, $16 billion wiped off their stock market value, the upcoming Disney+ and other streaming services that will kill off Netflix… I may as well pack up and end New on Netflix and save myself a load of time and hosting costs.
Let’s just have a look at the details surrounding Netflix’s announcement and what they actually mean:
Loss of Subscribers
Most news outlets are reporting on the fact that Netflix lost subscribers for the first time since 2011. The truth behind this is that they lost 126,000 subscribers from in the USA – not all over the world. In Q1 2019 Netflix reportedly had 60.23 million subscribers in the USA (source) so this ‘mass exodus’ of subscribers in this latest release is a fairly paltry 0.21% drop.
They also gained 2.7 million new subscribers around the rest of the world. So, while this still didn’t meet their estimated 5 million new subscribers, it is still proof that they are growing and not in decline.
What could have caused the loss? This is all speculation but it could be related to the recent US price increase or the fact that Netflix are separating their disc delivery and streaming services. At the end of the day no one knows – but if you or a friend has unsubscribed in America recently I’d be interested to know the reason(s).
News of these subscriber targets not being met resulted in $16 billion being wiped off the value of the company. This is, of course, a ridiculously large amount of money but, when put in context, Netflix is still valued at $142.2 billion – an insane amount of money. Furthermore, as reported by CNBC, this value is still a 21% increase from the start of the year. Hardly a sign of a company in decline.
But What About Disney+?
Flippant answer: what about Disney+?!
Fuller answer: There are lots of news articles around claiming that the upcoming streaming services Disney+ and WarnerMedia’s HBO Max etc will be the end of Netflix. Personally I don’t think it will really make a difference as there have already been stats released showing that most Americans already have multiple subscriptions to streaming services anyway so why would that change? There will be different content on the different streaming services so users will pick and choose what they want and, with the ease of cancelling/resubscribing it’s more than feasible that users will swap and change depending on what they want to watch and when. I already do this with NowTV – I’ll subscribe for a month or two to catch up on The Flash or The Walking Dead but then cancel again.
Another thing worth remembering is that these streaming services, at present, are US-only so most of this scaremongering makes little to no difference to the majority of the world. In the UK we have had Disney Life for a few years. Guess what? People still subscribe to Netflix (and Amazon and NowTV…).
In America it is true that in order to get all the content you want then you may have to subscribe to a few more streaming services and the total cost may be a bit extra, however for the rest of the world it is likely that HBO and other shows will end up on other streaming services in the same way that “Titans”, “Riverdale” etc are branded as Netflix Originals outside of the USA because there is no HBO or DC Universe outside of America. They’re going to want to make some money from their content with worldwide deals with the likes of Netflix, Sky and Amazon. With this in mind, it is highly likely that Netflix will continue to focus on their worldwide market – something that many American news sites seem to forget about – and keep growing their content slate and subscriber numbers this way.