Netflix offers its subscribers an amazing list of movies and television content which gives audiences the perfect excuse to lounge around on a lazy day. However, the easy access to technology and a new wave of binge-watching brings Netflix to face a crucial demand in producing enough content to satisfy customers.
The company must also consider turning profit as American subscriptions are dwindling.
It’s easy to be skeptical about how Netflix could possibly be hurting with a revenue of $6.78 billion as of 2015 and having 83 million subscribers around the world.
However, the company isn’t gaining as many new subscribers as they had hoped. In 2014, they tried to fix this deficit by allowing everyone who already had an account to continue paying the monthly fee of $7.99, while new customers would begin paying $9.99 per month. But even the old customers, all 37 percent of Netflix’s consumer base, had to pay $9.99 as of May 2016.
Last month, Netflix announced that they gained around 1.7 million subscribers for the quarter, which was harrowingly lower than the expected 2.5 million. This is most likely related to price increase and the prediction that prices will be raised again in the near future.
Besides the jump in prices and a withdrawal of potential customers, a trend has been looming over Netflix.
It’s causing a bit of a stirrup for the company when adding new content for subscribers. This trend is none other than binge-watching. It’s incredibly easy to fall prey to binge watching episode after episode that leave you wanting more, but nothing more comes since the season is over.
This habit leaves Netflix to handle the issue of keeping up with the binge-watchers by adding new content and supplying enough to choose from. Perhaps that is why Netflix has been producing their own original series’ left and right, such as: “Orange is the New Black,” “Stranger Things” and “House of Cards.”
Netflix has created a monster and must now continue to meet the standards of today’s society of binge-watchers. They must face the dilemma of drop-in subscribers in the United States, or else more of their subscribers will turn to other sources for entertainment.
Of the 1.7 million subscribers added during the quarter in July, around 1.5 million were international customers, leaving less than 200,000 added in the U.S., according to NBC.
By 2018, the majority of Netflix’s subscribers are expected to come mostly from international users, rather than from the U.S., according to statistical data from the analytics company, IHS Markit.
This is great for Netflix, seeing as they cannot rely solely on their U.S. subscribers. On the downside, there will be a lot of red tape to follow when trying to abide by censorship laws from other countries. Competition will also start to arise from other streaming networks worldwide.
North Korea recently unveiled their own version of Netflix, called Manbang. The name undoubtedly raises a few eyebrows for English speakers, but in the Korean language, the term ‘manbang’ means ’everywhere’ or ‘every direction.’ The streaming network allows viewers to watch television in real time but also learn languages such as English and Russian.
Just like any company, Netflix faces obstacles along the road. Times are changing and so are prices and people’s expectations. As long as Netflix keeps up with the viewing trends of the world, the renowned company will hopefully stick around as the leading streaming platform for many years to come.