Summative 1 Netflix

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PRICE INCREASES CAUSE PEOPLE TO UNSUBSCRIBE – NETFLIX

Done by: Akhil Paul

Netflix is a streaming service and production company based in Los Gatos, California.
Founded in 1997 by Reed Hastings and Marc Randolph, Netflix provides access to a
constantly expanding movie and television library. What sets it apart from its competitors is
its collection of original TV shows, and movies, tons of quality programs, and an easy-to-use
interface. Netflix has a collection of original TV shows and movies. In the entertainment
sector, Netflix, with over 15,000 content titles in several languages, including award-winning
TV series, documentaries, movies, and anime, is unrivaled. With an easy-to-use interface,
Netflix provides high-quality programs and shows and it is totally free from advertisements.
Each viewer's experience with the platform is unique, tailored to their viewing habits,
interests, and how they interact with the platform. Offer a tailored experience: Using big data,
Netflix is able to offer each of its 208 million subscribers content that they want to watch.
Apart from all this, the movies can be downloaded offline.

In the last ten years, Netflix has become an influential brand not just in the US, but around
the globe for online streaming content. Within a short period of time, Netflix became a
household name. According to Interbrand, Netflix ranks 36th in 2021, with a brand value of
$15.0 billion.  With over 190 countries in its service area, Netflix is one of the most popular
streaming services in the world. Over 167 million Netflix subscribers give Netflix strong
bargaining power with studios when it comes to securing exclusive content.

Netflix has its weak side as well, Netflix does not own most of its content, which negatively
impacts the company. Once the rights to the content are taken from other studios, they expire
after a few years, and they begin to appear on other websites. Customers demand more
options when it comes to pricing. Due to Netflix's rigid pricing model, it offers only three
tiers: Basic, Standard, and Premium. There are not enough options, which has contributed to
a stagnation in new subscriptions. Other new video streaming services, such as Disney+ and
Apple TV+, have introduced their services at much lower prices than Netflix.

Netflix added 420,000 US subscribers in the fourth quarter of 2019, falling short of its target
of 600,000. Its target in Canada was 218,000 subscribers, but it only added 125,000. North
American subscriber growth has slowed for the third quarter in a row due to market
saturation. Due to market saturation, Netflix will find it more difficult to add new subscribers
in the future. With the increase in daily users due to the lockdown, the number of hacked
Netflix user accounts increased dramatically in Q1 and Q2 of 2020. If account hacking
continues, frustrated Netflix customers may flock to competitors. Netflix is not the only
company that offers digital streaming all over the world. Every year, the number of
competitors grows. Disney+, Apple TV+, HBO, Amazon, Hulu, and YouTube are constantly
competing with Netflix by providing subscribers with ongoing access to the new and original
content.

The recent increase in inflation has prompted many consumers to consider tightening their
budgets. This usually means putting more money into necessities such as utilities and
groceries, and less into recreation and luxury items. In these tough times, Netflix, a company
that dominated streaming for nearly a decade, is one of the major media players suffering. In
the first two quarters of the year, Netflix lost 1.2 million subscribers. In the second quarter
alone, there were a record 970,000 users. So, what is causing Netflix customers to
unsubscribe from the service? Two-thirds of respondents say they intend to cancel the
service, citing higher subscription prices as the primary reason.

To stop the bleeding, Netflix is expected to launch a lower-priced ad-serving version later
this year. Netflix has also announced a partnership with Ubisoft. While Netflix is losing
subscribers, it is also strengthening its alliances. According to reports, Netflix has partnered
with Ubisoft to support its fledgling gaming business. Ubisoft is one of the largest video
game companies in Europe. Netflix will release three new mobile games based on Ubisoft
titles next year. At a time when its streaming business is slowing, Netflix is attempting to
boost growth in its new gaming division. Since April, when the company revealed that its 10-
year growth in subscribers had come to an end, the streaming conglomerate's market value
has more than halved. The French gaming group developing mobile games for Netflix is part
of the collaboration. A castle-building and monster-hunting game based on Ubisoft's Mighty
Quest will also be included, as will the historical puzzle-adventure game Valiant Hearts. The
games will only be available to Netflix subscribers and will be free of advertisements and in-
app purchases. It will enable Ubisoft to reach new audiences and test new formats within
existing games. There are currently no details about the game. Netflix entered the gaming
industry last year, hiring a number of high-profile executives and partnering with some of the
world's largest tech companies in an attempt to capture a piece of the most valuable part of
the entertainment industry. Amazon, Meta, Google, and Apple have all increased their
investments in video games in recent years, vying to become the "Netflix of gaming."

A smart strategy is all about doing what others can’t do. Offering ads is hardly among them.
It makes it more difficult to distinguish Netflix from its competitors. Despite the price
increase and loss of funds, Netflix can go for much better strategies to climb out of this hole.
According to an anonymous talent rep, Netflix should focus on marketing individual shows
and movies, improve the quality of its films and release some of them in theatres, and spread
out the release of episodes. Until then, Netflix is in trouble.
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