Netflix has, without a doubt, cemented itself in the cultural zeitgeist. Once a movie rental service in the vein of Blockbuster, it has developed to become the largest subscription streaming platform in the game.
But now, discussions about how long it can hold onto its title have started popping due to the rise of competitor services that are looking for a cut of the lucrative subscription streaming market.
Let’s delve further into this issue and weigh the factors that may cause Netflix’s downfall.
Peak & Decline
Netflix is currently experiencing a peak in its timeline.
Being one of the few companies that benefited from the coronavirus pandemic, the platform recorded a growth of 15.8 million subscribers as more people stayed home to avoid the virus. That brought on quarterly earnings of $5.77 billion, which exceeded initial estimates.
Looking beyond this, though, Netflix seems to be going through a decline. Despite constantly producing and releasing original content, its biggest hits are now behind it with the exception of its sci-fi horror series, ‘Stranger Things’.
Expensive Content
While Netflix has garnered a reputation for producing high-quality original content, this same claim to fame might also lead to its downfall.
Making movies and shows isn’t cheap at all. For example, the streaming service recently spent a whopping $159 million just to produce the Martin Scorsese-directed movie ‘The Irishman’.
This splurge certainly shows a shift in Netflix’s current priorities after gaining a massive subscriber base by having licensed content. In 2018, it spent 85% of its $13 billion budget for content on creating original offerings.
The shift can be seen as a direct response to the rise of other streaming platforms owned by the big studios that used to license their content to Netflix.
Giant Competitors
Two of Netflix’s potential rivals for the top spot are HBO Max and Disney+.
This is due to the fact that both platforms have a larger library of original content that they offer viewers. And being backed by industry giants like Warner Media and The Walt Disney Company, the two new streaming services can easily tap the large audience they’ve gained over the years.
In the end, only time will tell whether or not Netflix’s loyal subscriber base will jump ship to these other platforms.