Since the news dropped that Netflix failed to hit revenue and subscriber targets after the Q2 figures were released, the video streaming goliath might as well feel like the ending credits have finally come. Everyone from Toronto to Timbuktu has started to panic, which would explain why Netflix shares dropped 14 percent and close to $10 billion has essentially been wiped from the company’s market capitalization.
Is it Curtains Closed for Netflix?
So, with all that Wall Street jargon out of the way, what could all this mean for Netflix? Well, less original content, for one. Netflix is creating more original shows and films than ever before, with several of them being produced far away from the US. ‘3%’ (Brazil), ‘La Casa de Papel’ (Spain), ‘Sacred Games’ (India), ‘Dark’ (Germany) and ‘The Rain’ (Denmark) have all become massive hits alongside homegrown favorites like ‘Jessica Jones’, ‘GLOW’, ‘Stranger Things’, ‘Riverdale’, ‘The Crown’ and ‘House of Cards’. Adding 674,000 domestic subscribers and 4.47 million international subscribers doesn’t sound bad at all, but when your target is 1.23 million and 5.11, respectively, then those shows won’t pay for themselves.
Could the problem be that Netflix is trying too hard with its original content? Perhaps. Netflix sure doesn’t hit a home run every time, that’s for sure. For every ‘Daredevil’ there’s a ‘Marco Polo’ and, sooner or later, all those expensive flops sure start to add up. The good news in spite of Netflix’s recent plummet is that, well, there is still a massive gap between it and other competitors. The sheer number of Netflix alternatives, particularly Amazon Prime, are certainly noteworthy but still lack the affordable pricing and quality original content that Netflix subscribers can get. However, we all know that bridges can be built over gaps.
Hulu, Amazon, HBO, CBS, and YouTube will soon be joined by Disney as streaming providers aiming to topple Netflix’s crown, and if you think that not being able to watch ‘Frozen’ or ‘The Little Mermaid’ is no great shakes, then keep in mind that Disney owns Lucasfilm, Marvel, and – if negotiations go well – then all Fox-produced content as well. This means that if you’re a ‘Star Wars’, ‘Avengers’ or X-Men’ fan and wish to stream the movies in the future, then you’re going to need Disney’s service.
All in all, Netflix’s movie catalog has never been one to rave about, and with the company so transfixed on producing great original shows, it’s likely that it won’t be too concerned with losing a few movies here and there, but losing subscribers? Now that’s something to worry about. But for a business that literally changed the game of watching TV and movies at home, we feel like they definitely have an ace up their sleeve.