Is Netflix's future really in danger?

Is Netflix's future really in danger?

In 1997, Netflix was an online DVD rental company that probably didn't think at the time it would become a true video platform. How things have changed. That said, all empires have an end and according to one Forbes editor, Netflix's may soon disappear.

How could a titan like Netflix disappear? The number of users is considerable, the number of series and films available on the platform continues to grow, customers praise them in all languages, so where can be the problem? It can be summed up in one word: competition.

Netflix has been alone - or almost alone - in the market for a long time, enough time to attract users to its service and finance quality content to keep it there. With an attractive subscription price, it has everything it needs to please a wide range of users. Unfortunately, a few long-toothed gourmets have decided to eat parts of Netflix's cake: difficult to share when you're not used to it. Netflix has the potential to resist all this and it relies essentially on its original content to keep the user loyal, but things are more complicated than that.

Will Netflix really disappear? / © NextPit

The first element to be taken into account is the weight of competition, particularly from Disney. Farewell to Star Wars movies, Marvel movies and other content under the Disney umbrella : they will desert Netflix to leave for the in-house platform, Disney+, which will be launched in 2019. For Netflix - especially the US platform - this is a real blow.

But the biggest problem is that to stand out from the competition, Netflix invests huge sums of money in content production. This year, the budget for films and series amounted to no less than $13 billion. The concern is that Netflix does not have this money, the profits made are far from being able to finance such amounts. Thus, its debt has increased by 71% and places it in a difficult situation where only two options are available to it: continue in debt or rebalance the finances. Some companies operate while being over-indebted. Even Amazon operated at a loss for years. That said, if the numbers continue to decline exponentially, the reactions from shareholders will not be tender.

As for the second option, which amounts to increasing the price of Netflix packages and/or limiting investments, in both cases it makes the service less competitive: the quality of content and low cost represent the platform's strength, changing strategy is a risky undertaking.

In short, is Netflix at a dead end? Do you think the streaming giant's days are numbered?

Source: Forbes

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  • harshatecordeon Dec 11, 2018 Link to comment

    Good information..Thank you for sharing

  • storm Dec 11, 2018 Link to comment

    Why should anyone care? If Netflix fails, there's no shortage of other companies to take up the vacancy. Netflix itself is now a commdity and conusmers should treat it like one.

    The frugal viewer knows it's all about time shifting. Within 6 months to a year it's on blu ray from your library or Redbox for a fraction or free of the first run cost. First run viewership is about you subject to the media you like. Make it subject to you. Cheaper and a better use of your time.

    • Gavin Runeblade Dec 11, 2018 Link to comment

      Subscribing to 20 different services is more expensive than subscribing to one. By fragmenting the cost will go up. It's like subscribing to AmazonPrime with all the individual channels, Hulu, YouTube Red, CBS All Access, etc. That's never going to be cheaper than just Netflix.

      • itprolonden Dec 11, 2018 Link to comment

        It will if they have everything you want. And no one I know of subscribes to 20 different services. 3 maybe.

  •   46
    Deactivated Account Dec 10, 2018 Link to comment

    The problem I see with Netflix and the other competitors is it will fragment the market. Soon you will have to have every competitor subscription to watch their movies, making it to expensive again. Like with cable having to pay 200 bucks a month to get every thing. I think it just make the pirate sites more popular.

  • Albin Foro Dec 10, 2018 Link to comment

    Meh. I'm happy with Criterion's announcement that its own new streaming service is coming to Canada (as previous arrangements didn't) and have prospectively signed up for a discounted advance subscription. Those interested in streaming foreign and art films not on Netflix should google up: Criterion new streaming service. (Citizens of cities with good library systems are likely to be surprised their taxes are already paying for video streaming services like Kanopy and Hoopla and other media as well.)

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