Netflix Set For Slowest Revenue Growth As Ad Plan Struggles To Gain Traction (reuters.com) 48
Netflix is expected to report its slowest quarterly revenue growth on Thursday as its ad-supported plan struggles to attract customers in the saturating U.S. market, which could pressure the company to pull back on content spending this year. Reuters reports: The streaming pioneer has been reeling under strained consumer spending, rising costs of financing production and increased competition from Disney+ and Amazon Prime. It had pinned its hopes on the launch of the ad-supported tier, but analysts say they have not seen a burst of subscriptions.
The company is expected to have added 4.5 million subscribers in the fourth quarter - the lowest addition for the holiday period since 2014. It added 8.3 million subscribers a year ago. The $6.99 per month ad-supported plan does not have access to all titles and is not cheap enough to win over significant numbers of customers in the United States and Canada, analysts say. That is likely to draw focus on Netflix's aggressive content spending, which finance chief Spencer Neumann said in July would total about $17 billion annually for the next couple of years.
The company is expected to have added 4.5 million subscribers in the fourth quarter - the lowest addition for the holiday period since 2014. It added 8.3 million subscribers a year ago. The $6.99 per month ad-supported plan does not have access to all titles and is not cheap enough to win over significant numbers of customers in the United States and Canada, analysts say. That is likely to draw focus on Netflix's aggressive content spending, which finance chief Spencer Neumann said in July would total about $17 billion annually for the next couple of years.
So...paying to watch ad's didn't take off? (Score:4, Funny)
NO WAY DUDE!
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It seems to work for Hulu? But the idea of paying Netflix for ad-free programming, enduring years of price increases, then being offered a less expensive ad-supported tier, is probably a different beast.
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Seems to work? They have 13% market share vs netflix 20, with a lower ARPU. Maybe it works, but does it work better?
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For me the issue is cancelling stuff I like. Once Netflix started cancelling things I stopped being interested in subscribing to it regularly. I'd rather wait for stuff to build up, see if it lasts more than a season, and then binge it all in one go.
The cancellation and not getting any satisfaction from Stargate Universe still annoys me, all these years later. That's how frustrating not supporting shows is.
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As a person living in a Developing Market... (Score:3)
...(Venezuela) I can say I completely agree with this quote FTFA:
Still, some analysts believe that the ad-supported plan will pay off in the long run, especially in developing markets, where spending power is weaker.
I knnow this is true, and know a lot of people who went to Ad-Supported tiers of other services just to save a a little. The same will happen with Netflix in developing markets, just give it time.
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I'm not in a developing market, but IMO, it depends on how bad and invasive the ads are. Personally, I rotate the streaming services, binge on one (ad free) and get caught up on my series, cancel, and then pick another. It would take a large price delta to get me to drop down to the ad-supported plans, given that I generally only pay for one service at a time.
Re:As a person living in a Developing Market... (Score:4, Insightful)
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OK but if somebody doesn't have money to spend on streaming, surely it's also not worth paying much for them to view your ads, since they'll also be spending less on new cars, less on beer - less everything.
Actually, while is true that they will be spending less on a new car, they'll spend more on beer, clothes et al. Is simply that the advertisers have to be smart about what they advertise where. You will not be advertising luxury cars (unless you want to create a halo effect), instead, you will advertise basic necesities (go for my brand name flour, instead of the no-name flour which is cheaper), fragrances, clothes fast food and the like.
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surely it's also not worth paying much for them to view your ads
Clearly you've never been to China or Africa if you think this is some kind of ad-free utopia.
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What, why? If people want an ad-supported tier they can turn on their TVs to watch hundreds of channels free-to-air content. Why on earth would they pay Netflix for such an experience, especially when the tier they're offering doesn't have access to interesting content?
Have you seen the OtA content in developing markets?
No?
Then you are in for a nasty surprise.
No such tingh as "hundreds of channels"
And in the few channels that exist, the content is in a loop.
Could it be due to early cancellations? (Score:3)
https://www.forbes.com/sites/p... [forbes.com]
Why commit to a show if Netflix will cancel it? Wait until there is already a second season -- if enough people do this, the show never gets enough viewers to warrant renewal.
Re:Could it be due to early cancellations? (Score:4, Insightful)
I doubt it. It's not helping, but I suspect the answer is much simpler: there are other streaming services out there that offer better content at a lower cost.
Part of that is that Netflix simply isn't willing to invest in high-quality content, instead they develop a whole bunch of shows and then cancel the ones that underperformed under some metric. So, sure, that's a piece.
But the biggest piece is that Netflix is no longer the only option, and others offer similar services for less.
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I have to agree. Netflix was the first streaming service I subscribed to but to be totally honest, Amazon's Prime Video delivers a whole lot more for a whole lot less money (at least in this part of the world).
Much as I despise Amazon as a corporation they are delivering better value than Netflix.
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I doubt it. It's not helping, but I suspect the answer is much simpler: there are other streaming services out there that offer better content at a lower cost.
People's opinions on the value are affected by these cancellations.
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Huh? Why would anyone care if there is a second season? A season as designed is supposed to contain a fully self contained story arc. Not every damn piece of media needs to be some epic multi-season tale or part of the some cinematic universe.
This fetish of making things run as long as possible is the single worst part about western entertainment and leads to drawn out boring writing that only perpetually attempts to setup some stupid future season.
We should go back to a world where people sign up to make a
Overpriced (Score:4, Interesting)
almost all (Score:1)
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*Some* being the keyword. After you've watched all 3 of them, what else is there? The endless supply of wokie garbage? Bad writers make bad shows, with 90% of their content geared towards the younger generation. So if you're only appealing to 20% of the average streaming population, then you probably aren't going to be doing so well. Obvious to everyone, but a hard lesson for Netflix and Disney.
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... Apple TV + has a small catalog, but it has probably the second best original shows and movies after HBO Max. ...
Grogu takes exception to your opinion.
"Help me, Doc!" (Score:2)
NetFlix: I feel like the life is flowing out of me, you gotta help me Doc!
Doctor: Do you think it's might be that bullet wound in your foot?
NF: No, it can't be that because that's soaking up good advertisement energy.
Doc: Hmm... well, what have you been eating?
NF: Carrots.
Doc: Umm... anything else.
NF: No, literally just enough carrots to prevent me from passing out.
Doc: Oh, I was afraid of this... your condition is terminal.
NF: What is it?
Doc: You're an idiot.
Meh... (Score:3)
I haven't done any real comparison of streaming sites. However, I already pay for Amazon Prime. I get enough stuff from them a year to make it worth my while. As near as I can tell, they've got enough content "for free" to keep me entertained for a year that I don't feel like I need another streaming service. Netflix/Hulu/Paramount/Apple/whoever are going to have to step up their game to get me to spend even an extra dollar a month for streaming video content.
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Prime, like all other services gets rotated. I will be cancelling Prime and probably not renewing for the next 6 months to a year. I just ordered a years worth of non-perishable items so I can do just that.
On several products that I buy, Prime cost more than buying the product w/o Prime. Sometimes the Prime shipping out performs the normal shipping, but usually, the products I buy arrive either the same day or maybe a day later. "Meh..." is appropriate.
On the video offering, I'd like a big 'ol patented Amaz
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If you can select what you want to watch based on what one streaming service offers you, more power to you, but I think for a lot of us, the shows we're interested in seeing don't align to a single service that well. My wife and I watch Stranger Things, Only Murders in the Building, Strange New Worlds, Andor, The Wheel of Time, and Ted Lasso. Plus leaving the TV playing reruns of MST3K or Star Trek when we're not actively watching anything else. That short list is 7 services. (Though admittedly, the last pa
Paramount decree (Score:4, Interesting)
It used to be law that studios could not own theaters. I know these services are not totally analogous to the old Hollywood cartels but I feel as though a decoupling of video provider from production would improve the space.
In lieu of a total decoupling I would say a timed exclusive on any content, after that it has to be licensed out for a reasonable rate to anyone who wants it.
I get the idea the services "compete on the shows" but I'd prefer they compete on selection and service because really brand loyalty is meaningless. Every service has shows I like and some I don't, obviously I would prefer a service that gives me the most things I like, I don't care who's name is on it.
No Movies (Score:2)
FAANG company hits peak market penetration... (Score:3)
... more at 11.
This seems pretty logical to me, honestly.
There are only so many people out there that actually want to watch TV/movies, regardless of topic.
Once you've snatched up your slice of the classic reruns, cracked the internal production quality gap to challenge many large studios, covered the primary preferred delivery timeframes (episodic weekly/binge, mini-series, annual, singles), and you've saturated the reasonably available genre space for new material, you're pretty much done.
There's certainly few engineering challenges left. The content delivery pipelines for Netflix are well established, and there are plenty of experienced engineers and producers out there ready to replicate it for anyone that's willing to sign paychecks.
The only space they have left to enter is live feed, and I'll be amazed if they even bother. At this point, they have a solid sized lifestyle company on autopilot. Why fuck with it?
I can't find anything to watch on Netflix anymore (Score:2)
... and I think that is the root cause of their declining profits.
When they hardly have anything I want to watch, even adding advertising will not add to their profits. 70 year old westerns and a shitload of cheap Bollywood movies just don't make it for me.
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I _think_ I can relate here -- I've found myself a bit frustrated with the introduction of foreign dubbed/subtitles films into my feed. It does seem like they were hoping for some continental content crossover to happen, but I think we're just a bit too snobbish in the US to bother to read subtitles unless we're watching very specific anime on direct purpose.
Netflix does have a few shows that do quite well -- Stranger Things, for example -- but, they don't have enough of them on constant new-episode rotatio
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Oh, and if you want to be dirt bags about money-grubbing, offer a Premier tier that gets to watch episodes the moment they land, and let the Deluxe and Standard (or whatever they're called) tiers watch them after a week or so has passed. You'll certainly find some addicts out there willing to pay for dopamine on demand.
Re: I can't find anything to watch on Netflix anym (Score:3)
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GUI is absolutely atrocious, things move constantly, couldnt even find my list of saved things the last time i tried. Netflix is a dumpster fire and should jsut give up already.
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#CancelNetflix (Score:1)
Noipe (Score:4, Insightful)
"Pay TV" and then being forced to watch annoying ads?
Gee, can't imagine why that wouldn't lead to record profits (sarcasm:off)
Re: Noipe (Score:1)
Pay for ads? (Score:1)
Boring (Score:3)
Netflix has some good stuff available. But it's very few and far between and very hard to find because of their idiot user interface that does not let you permanently reject offerings.
It's not worth it (Score:1)
Flat out left... (Score:2)
I left netflix after something like 15 years when they did this.
Now, I rotate between services for 2-3 months at a time.