The Netflix Conundrum

I stream, You stream, we all stream through various different mediums, that are ever expanding and somehow still produce amazing original content?! The landscape of streaming services is overwhelming with the likes of Youtube Red, Netflix, Hulu, Amazon Video, HBO GO all and new additions like Disney+ and Apple Tv all vying for our time; the competition is real. In our global world nobody wants to miss the “water-cooler” talk on Game of Thrones or Stranger Things so even though there is a standard increase in price across platforms viewership continues to rise.

Earlier this year Netflix debuted its biggest price increase since the creation of the service. Even though this negatively affected Netflix’s stock many say it is necessary due to subscription price being their sole form of revenue. Netflix is different from other streaming services because they are 100% ad free. With 139 million subscribers and counting, this seems like a missing market but netflix still hold strong in there policy. Saying “We, like HBO, are advertising free,” the company said in its letter to investors. “That remains a deep part of our brand proposition; when you read speculation that we are moving into selling advertising, be confident that this is false. We believe we will have a more valuable business in the long term by staying out of competing for ad revenue and instead entirely focusing on competing for viewer satisfaction.”

With a position this strong Netflix users are hopeful that the company will stay true with there promise for no ads. Many viewers use streaming services with ads the biggest being Hulu. However, Hulu has a tiered membership program, with ad free options which equals more money for Hulu. Netflix owns 71% of the global streaming video on demand (SVOD) market, the 2018 Global Television Demand Report found, and grabs 68% of the market in the U.S. With that big of a market many people assume with the competition increasing and popular shows like the office and friends being removed from the platforms in upcoming years. Netflix might have to offer a tiered program whether they like it or not. 

Whether this will cause subscribers to leave the program in droves is still up for debate.The only thing know, in this equation, is the streaming market is only going to increase. Netflix focus on original content and a global audience has kept them in the forefront of what a streaming platform brand should be doing. This will continue to change and keeping an eye on it for the next few years may prove to be quite interesting.