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The rise and fall of Netflix
Subscriber loss has raised concerns about streaming giant’s future profitability
With more subscribers than any competitor platform, thousands of shows and production hubs in cities across the world, Netflix has dominated streaming for years.
But the US company’s share price has “tumbled” after the announcement this week that it had lost 200,000 subscribers globally in its most recent financial quarter, and expects to lose millions more in the next three months, said The Guardian.
The news has “sparked a flurry of fightback efforts”, with some calling into question the future profitability of the company.
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Netflix launched in the US in 1998, but it wasn’t until 2007 that the company “came up with the idea that would change the way we watch everything”, said Quartz. Streaming would allow Netflix to shift from being an online DVD rental business competing with Blockbuster to an on-demand entertainment service for American audiences.
“The impending death of the company” had been predicted several times in the years before, but streaming was set to give Netflix “a toehold in the embryonic world of Internet movie distribution”, said The New York Times.
House of Cards was one of the company’s first original productions
Its territories quickly grew, with Canada, Latin America and the Caribbean getting Netflix in 2010. The UK would have to wait until 2012 – and when the platform eventually did arrive, the company was expected to face “fierce” competition from rivals Lovefilm and Sky Movies, said the BBC.
But Netflix was confident it could win over UK audiences. Chief executive Reed Hastings told the broadcaster: “Relative to each of our competitors we have different differentiators, but Netflix is very focused on streaming and we do it really well.”
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Within weeks of the launch, UK performance had “exceeded expectations with faster subscriber growth than the company saw when launching into the broadly comparable Canadian market”, said The Guardian.
The company began creating original content in 2010, with US political drama House of Cards among the first of its productions to air in 2013. “If Netflix wanted to come out of the gates strong as a content provider worthy of any cable channel, it picked a stellar choice,” said Hollywood Reporter.
The company’s investment in ratings data and its algorithm also meant that while other studios were testing out pilot episodes, Netflix “already knew” that the show would be popular, “and immediately signed up for two seasons”, said Business Models Inc. This insight has meant the service can keep viewers hooked with a seemingly never-ending supply of content tailored to their tastes.
This week, season two of Bridgerton “settled its supremacy battle” with season one to become the most-watched English-language show in its first 28 days, said Indie Wire. SquidGame holds “the overall championship record”, with 1.65 billion hours of the show streamed in the first four weeks of its release. “The breadth of Squid Game’s popularity is truly amazing,” said Netflix.
Stranger Things, The Crown and Better Call Saul have also helped to cement the streaming platform’s success over the years, as have award-winning films including The Power of The Dog, Ma Rainey’s Black Bottom and Don’t Look Up. An Oscar win for Roma director Alfonso Cuarón in 2019 “was a tipping point in the streaming industry’s dominance over the world of entertainment”, said The Telegraph.
However, the company is now in “deep trouble”, with “fear of more woe to come”, said the newspaper. Many viewers access the platform for free with other people’s account details, and some have said the subscription is too costly as they face rising household bills.
“Can Netflix escape its own Blockbuster-moment?” said the paper. “How [CEO Reed] Hastings moves forward marks the biggest challenge yet for Netflix.”
Julia O'Driscoll is the engagement editor. She covers UK and world news, as well as writing lifestyle and travel features. She regularly appears on “The Week Unwrapped” podcast, and hosted The Week's short-form documentary podcast, “The Overview”. Julia was previously the content and social media editor at sustainability consultancy Eco-Age, where she interviewed prominent voices in sustainable fashion and climate movements. She has a master's in liberal arts from Bristol University, and spent a year studying at Charles University in Prague.
