Is Netflix destined to be doomed?
By: Aishwarya Guda
Tags: Business Strategy, Business Development, Netflix, Business Analysis, Market Research Reports

Is Netflix destined to be doomed?

Netflix has exceptional organizational culture, leadership style, and innovational practices which lead to the world’s first video streaming service that has 214 million paid subscribers. On my journey to understanding Netflix deeper, I am sad and disheartened to see that Netflix might fail in this decade due to the following reasons.

Limited Options: Netflix only streams TV shows, movies, and documentaries. Competitors are providing additional services like live TV, sports streaming, music, and games included in the same subscription plan. Decentralized streaming: With the advent of technology innovation, decentralized video streaming services are ready to go mainstream. The service is as good as any paid subscription but offered at a much lower price. Customers are being rewarded with community and crypto tokens for using, hosting, and maintaining these services. Alternate cable TV: Recently, IPTV has disrupted the cable TV industry by providing personalized TV viewership options. IPTV is taking 14% of the OTT industry, and YouTube TV is yet to roll out globally. This will directly affect Netflix viewership.

As an aspiring strategy & innovation consultant, I propose the following solutions:

Enemy of my enemy is my Friend: Team up with companies facing the same global competitors (Apple, Google, Amazon) in a different industry like Spotify for music, Gameloft for games. Make deals and establish partnerships where all the companies can benefit mutually. Improve the merchandise business: The Netflix shop does not have good designs to convert into sales. You can change that by starting a fashion division within Netflix. Enable an interactive option to purchase clothes and accessories that are worn by actors on-screen while watching the shows. Tap into NFT Market: Non-Fungible Tokens (NFTs) i.e., Digital collectibles are the next big thing for companies in the entertainment industry. Recently, an artist Michael Joseph Winkelmann sold a video clip for $67,000 as an NFT, later re-sold for 6.6 million dollars. People have spent more than 230$ million dollars buying and selling NFTs of NBA highlights. Netflix can create and sell NFTs of iconic moments, short clips from Netflix Originals.

Frameworks and methods used for market analysis.

Proter’s five forces

Competition in the industry: The success of Netflix has attracted global giants like Amazon, Apple, Disney. Every regional production house or broadcast network is having a digital transformation and entering the streaming space. As Netflix offers a library of films and TV series through distribution deals, most of the content on the platform will disappear as contracts expire. Global competitors like Amazon, Apple, Disney have deep pockets and support from their umbrella companies that lets them offer services at a discounted price. Regional production & broadcast companies have advantages of content they have been producing for 50+ years and the customer royalty that comes along. Threats of new entrants: Regional production companies are emerging in the market by leveraging their age-old content and targeting their niche customer groups. As they already hold the broadcast licenses or the original movie rights, these production houses and broadcast networks don’t spend much on acquiring content. For example, India’s video streaming market is growing to $5 Billion from $500 million in the next 2 years, primarily because of new players entering the streaming industry. Threats of Substitutes: YouTube is launching its own live stream platform (YouTube TV) in the U.S and worldwide by 2026. IPTV (Internet protocol television) is a new way of watching old-school TV channels. It uses the internet to search any kind of video content and streams directly on your TV or smartphone allowing customers to view, pause & record live tv, sports, regional movies, and tv shows throughout the world. Currently, IPTV is offering a service to start your own OTT platform with inbuilt IT infrastructure. It already gained a 17.8% market share of the entertainment industry and is experiencing accelerated growth. Power of Customers: Customers can choose from a lot of options and with Gen-Z being more tech-savvy, people are finding ways to download free content from the internet. Power of Suppliers: The market is in a unique growth phase where artists are getting an opportunity to produce video content that can be streamed globally on every platform. The cost of production and acquiring new content keeps increasing with artists, production houses starting their own streaming services.

Customer Value Map

Proposed Strategy Roadmap to avoid the disaster

What strategies would you propose to help Netflix grow? Let me know in the comments below…