Netflix, the big streaming company, will tell us how they did in the first three months of this year on Thursday. People on Wall Street really like Netflix. But experts say most of their success came from their old way of doing things. Now, Netflix is changing a lot.
Other streaming services like Disney+, Hulu, Max, and Peacock make their own shows to get people to subscribe. But Netflix is doing different stuff.
They’re getting into live sports, video games, and making deals to show other companies’ stuff. Also, they used to not have ads, but now they’re adding ads.
Netflix did something risky last year. They told people who share passwords to get their own accounts. This worked well for them.
In January, they said they got a lot of new subscribers, which was their best ever. Their stock went up by 31% this year. That’s better than other companies like them.
But now, the good effects of making people stop sharing passwords might be going away. An expert, Ross Benes, thinks so. He says Netflix won’t get as many new subscribers as before. He says this because the boost from stopping password-sharing is fading.
We’ll see more about this when Netflix talks about their earnings on Thursday. We want to know if their changes are helping them do better.
Netflix’s Changing Strategy
Netflix had a tough time at the Oscars last month. They got a lot of nominations but only won one award. It’s making them think about doing things differently.They’re exploring alternative avenues rather than investing substantial funds into large-scale movies and shows.
One thing they’re doing is getting more shows and movies from other companies. People are loving old shows from the 90s and 2000s when they come on Netflix.
Alicia Reese, who studies Netflix for a company called Wedbush Securities, says this is working well and saving them money.
Netflix is also trying out live shows and sports. They did their first awards show in February. They even made a deal to show wrestling live for 10 years, which cost them a huge $5 billion.
So, Netflix is trying new things to keep growing and keep viewers happy.
Netflix is teaming up with Grand Theft Auto to boost its game offerings. Netflix CEO Greg Peters is excited about GTA’s success on mobile.
Reese believes Netflix is doing great with its mix of content. She thinks Netflix has a winning formula. There’s something for everyone at different prices.
Netflix’s Advertising Growth
Netflix has introduced a cheaper subscription with ads. It costs $6.99/month in the US. This ad tier is growing fast.
In January, Netflix said it had over 23 million users for this tier. They’re hoping to grow more with ads.
Netflix thinks ads can help them grow. They want to get more ad money from TV. Their president of advertising, Amy Reinhard, said they have a very engaged audience. They want to get some of the ad money from TV to streaming.
They will talk more about ads in their earnings report. They want to give more details about the ad tier. They aim to take ad money from traditional TV. They believe their engaged audience can help them do it.
Also Read: Scorsese’s Next Film: A Beautiful Affair with DiCaprio & Lawrence