Is it just me, or are streaming services starting to seem a lot like cable? People looking for access to all their favorite shows and movies can easily spend over $100 a month on subscriptions to platforms like Disney+, HBO Max, Netflix, or Paramount+. That’s what many paid for cable subscriptions before they “cut the cord.” Other people are waking up to this fact as well, and it has led to some tough times for streaming services. The streaming wars are heating up as the landscape changes and more competitors enter the market. But one company continues to dominate all challengers — Netflix. How? There are three main reasons Netflix has been able to stay on top.
Netflix has gone through some rocky years of late. Stock prices have dipped, and it has restructured as the streamer adopted an ad-based, tiered subscription model and promised (threatened?) to crack down on account sharing. Last year, it announced one of its first significant drops in subscriber numbers in years, and its stock price plunged 35%. Netflix blamed the loss of subscribers on a few factors, like toughening competition and coming out of the pandemic. Since then, though, it has been able to scrape its way back to the top.
Netflix stayed the course and rode out the turmoil from last year, posting better-than-expected subscriber numbers in the middle of January thanks, at least in part, to solid, innovative leadership. One of Netflix’s long-time CEOs, Greg Hastings, is leaving the role and the company is promoting the current chief operating officer, Greg Peters, to be the new co-CEO with long-time leader Ted Sarandos. Although we are looking at some change, the controlled nature and lack of a big shakeup indicates the company likes its positioning and the direction these leaders have taken. The market likes them, too.
A Steel Spine
In the face of the outrage mob, Netflix has shown an unusual willingness to back its content creators. This support has been applied consistently, no matter where the controversy originated. Netflix took a lot of heat for the morally questionable “Cuties,” but stood by the film; in the same vein, Netflix refused to pull comedians Dave Chappelle or Ricky Gervais when they faced heavy criticism for their stand-up specials.
Say what you want about the content, but Netflix has stood up against cancel culture by consistently applying the same standards to its content. Through this consistency, it has avoided alienating 50% of the population on either side.
Even when Netflix faced internal strife and pressure, it refused to cave. In a world where a few outspoken employees can get a huge corporation to change course suddenly, Netflix’s approach has been a breath of fresh air to the majority of its customers, who just want to find some good entertainment.
Netflix’s own internal documents have warned employees from speaking out against content they deem objectionable; essentially, they need to respect creative freedom or find somewhere else to work. Controversial? Sure, but it also puts Netflix in the middle ground and keeps it squarely on the track of making money without engaging in public relations distractions.
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A Great Content Library
The third reason for Netflix’s continued success is the foundation it built that left them in the red throughout much of the last decade. Netflix has been consistently questioned on its huge expenditures on creating original content, but it is reaping the rewards now. Shows like “Stranger Things” (admittedly the only reason I’ve stuck with Netflix), “The Crown,” or “Ozark” have built Netflix a reputation of being infinitely bingeable and actually good. It has spent a fortune building this library, but this is why it will have lasting power. Like the old Bible adage, Netflix made its house upon the rock, and now it is withstanding the storm.
Even HBO Max, Warner Brothers’ premium streaming service, is cutting costs to position itself for future operations better. Most of these shows are reality or kids’ programming, but we are not seeing Netflix take similar steps. On the contrary, Netflix adds new programming regularly, both third-party titles and Netflix originals. This unparalleled content library means that for the cost-conscious streamer, Netflix has a clear leg up on the competition.
Set for the Future
Netflix has set a good foundation for future success. It helps that it pioneered the streaming platform, although innovators are not always the winner. Just ask Kodak or Nokia. The difference is that Netflix has continued to innovate and spent its early years building an excellent leadership team, a clear vision for its content, and arguably the best content library in the business. In short, Netflix’s future looks promising, and tactical decisions like introducing ads or cracking down on account sharing won’t put it on course for a crash anytime soon.