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Is Netflix’s Lack of Momentum (vs. Streaming Competitors) Worrisome?

Streaming service momentum is clearly here to stay, but is that a rising tide that’s set to lift all boats? Or does the pure volume of services available vs. hours in the day for consumers mean some streamers will inevitably struggle in the years to come?

It’s not a new question, of course. But it’s one that took on added context last week in the wake of Amazon’s MGM buy. Which took place in the wake of Discovery-WarnerMedia. It’s long been assumed that Netflix would be one of the giants left standing in the streaming wars. Yet (understandable) falling market share and limited subscriber growth of late have given rise to new concerns about the subscription video-on-demand pioneer. Including a growing number of opinions like this one, that also note the overall, noticeable content quality dip:

So is Netflix’s perceived lack of momentum worrisome? TV[R]EV analysts Alan Wolk and John Cassillo discussed the idea late last week.

Alan Wolk: To start, I’m not sure Netflix having an “alarmingly poor batting average on original TV and movies” is true. This is something I’ve been banging on about for a while: Most artistic endeavors are unsuccessful. Most songs don’t become hits. Most books don’t become bestsellers.

Networks know that even in their best years, before cable, they were lucky to have one or two hits. Netflix had a good run at the beginning because they were looking for just one or two shows — period. Not an entire line-up. There just aren’t that many talented people in the world and many times, even when you have a lot of very talented people working on a project, it fails.

And then other times, you have a show about a quasi-medieval world with wizards and dragons based on a somewhat obscure cult fantasy series with a cast of unknown European actors, and it goes on to become the decade’s biggest hit.

John Cassillo: I think Netflix really only had two “hits” in last nine months (basically The Queen’s Gambit and Bridgerton). Just tougher for the way they release things, vs. a network which can extend the burn on a hit show for eight months of the year. I agree with you — just think that’s how the tweet’s framing things, though.

AW: Yes, the all-at-once thing is going to bite them in the ass for sure. They only have a brief, movie-like window to get people to watch something before they’re onto the next thing.

JC: Yeah. “More” is a blessing and a curse.

AW: They got fooled because in the early days, a new season of Orange Is The New Black or House of Cards would get a ton of press because there were no other high-profile original series on cable/streaming. And they got used to being able to rely on all the press and social media buzz to market the show. That is not happening any more.

JC: Netflix forgot the market around them changed, and everyone else is also releasing big shows (arguably more frequently). Think the interface going all-in on the volume of “new” buried the good stuff too more quickly than it used to. Maybe the shuffle button is one way inelegant way to fix that.

AW: Yes, agreed on parade of “new” content. People used to go and watch reruns of Family Guy, and it was easy to promote Stranger Things to them. Now, there’s just a lot of new, and people are wary, because of both volume and because it’s a lot of unproven commodities. I’d be curious to learn how The Queen’s Gambit developed its buzz; marketing, social or random.

JC: From what I recall, it was released with minimal fanfare from Netflix, then the organic social and reviewer buzz was capitalized on. Don’t think they did much TV advertising (though Netflix doesn’t in general — they were the 16th-most-seen streaming service by TV ad impressions last year, per iSpot). That’s the other thing, though. Netflix doesn’t want to get burned promoting something that doesn’t do well, so they wait for the hype to confirm or deny that it’s good.

AW: To the original tweet’s point, I have definitely noticed my non-industry friends saying that there’s a lot of crap on Netflix these days. Without as much of the established library content from other studios (largely pulled into those owned services at this point), it’s really become mostly a string of mostly forgettable original series, with some documentaries and fairly recent foreign series they’ve bought the rights to. No real Disney-style franchises to be found.

JC: I’ve heard a lot of the same, as most people I know haven’t opened the app in months (admittedly, think I’ve barely watched anything on Netflix myself in the last 90 days). Series with subtitles and and tangentially-related-but-worse versions of successful reality shows they have is not a good strategy long-term. In terms of franchises, the recently released Army of the Dead provides some opportunities there, but it’s still a long shot.

This Sony exclusive post-theatrical window is their best bet for regaining some momentum, but: A) It’s still seven months out, B) It still doesn’t solve the originals problem for when people aren’t looking to watch movies, and C) All of that content only lives on Netflix for so long before migrating to a home on competitive Disney+ or Hulu.

So while there’s a good chance that people keep Netflix to watch Sony movies right after they’re in theaters, Netflix is really just growing their reliance on Disney services to watch those movies after that window expires — and drives their interest to Disney right away for related library content like all of the Spider-Man films.

It’s basically playing right into how Disney used Netflix as a testing ground before. Getting consumers used to streaming Marvel content on Netflix conditioned them to want to see (what wound up being better) Marvel content on Disney platforms when the time came, and Disney+ was the only place to do that. This will largely be the case again, but now for all Sony films too, as consumers realize the only way to watch those movies and related titles after the window is all Disney.

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This isn’t to say Netflix is “screwed” long-term. But a shuffle feature and a social network idea like N-Plus don’t just make up for the disparities between Netflix and its competitors’ revenue sources. For Netflix, streaming subscriptions are it. Disney has several services, TV networks, resorts, cruises and advertising, among other things. Amazon has its online retail arm. Even Warner Bros. Discovery has two services (for now) and ad support to buoy it beyond just selling subs.

At some point, they’re either going to have to figure out the franchise issue, or find additional revenue streams, if they want to stay competitive in the streaming wars. Because even if short-term concern may be premature, there’s a real issue long-term that Netflix is entering an arms race it simply can’t win with its current business.