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posted by
martyb
on Wednesday July 18 2018, @08:38AM
from the still-growing-but-not-[as]-fast-[enough] dept.
from the still-growing-but-not-[as]-fast-[enough] dept.
Netflix shares plunged by more than 14% in after-hours trade on Monday, after the firm reported disappointing subscriber growth.
Netflix said it added 5.2 million subscribers in the three months to the end of June, the same number it did during the period last year.
The streaming service had forecast growth of 6.2 million.
The decline in share price follows a successful run for the stock, which had roughly doubled so far this year.
Is the number of Netflix subscribers reaching a plateau based on its current library of titles, or are competitors eating into its growth?
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Netflix Shares Plunge as Subscriber Growth Rate Stalls
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You are a fluke of the universe; you have no right to be here.
(Score: 4, Insightful) by The Mighty Buzzard on Wednesday July 18 2018, @08:43AM (19 children)
Or maybe it has a finite potential customer pool and expecting subscriber numbers to grow like they have forever was foolish beyond belief. Regardless, competition in the space is a good thing; having NetFlix grow to capture their entire market would be astoundingly bad. Worse even than exclusive deals on content.
My rights don't end where your fear begins.
(Score: 1, Interesting) by Anonymous Coward on Wednesday July 18 2018, @10:27AM (10 children)
The one, basic fact that "business"-educated people never ever get, although it should be painfully obvious to _anyone_: eternal growth is impossible.
And yet, they're all totally surprised each time the growth ends. And they learn nothing from it. Like a moron running head-first into a wall time after time because he wants to be on the other side.
Now if they could just stop ruining all our lives in the process of their quixotical quest ...
(Score: 2) by JoeMerchant on Wednesday July 18 2018, @10:36AM (9 children)
As long as population keeps growing, so can business...
Me, personally, I think population passed its max comfortable level about 40 years ago, but as long as we keep adding consumers, business can grow to serve them.
🌻🌻 [google.com]
(Score: 3, Informative) by theluggage on Wednesday July 18 2018, @11:10AM (4 children)
As long as wealthy population with access to your product keeps growing, so can business...
Oh, plus, the population can't sustain infinite growth either - if it keeps growing, bad things will happen (like, higher proportions of the population living in poverty and not being able to afford to stream The Crown). Don't get complacent just because we're not eating people yet.
Oh, plus, you have to make more and more money to feed the parasites (like, you know, the shorters who make money for nothing when there's an insignificant blip in the share price which is still up 70% on a year ago and which will probably shoot up again when Stranger Things 3 comes out).
(Score: 2) by JoeMerchant on Wednesday July 18 2018, @02:15PM
We're not far off. Watch Chasing Coral (available on Netflix :-) if you want to be really depressed about the present and likely future of the environment.
🌻🌻 [google.com]
(Score: 2) by JoeMerchant on Wednesday July 18 2018, @05:00PM (1 child)
Well, I know a certain 86 year old woman who gets $500 per month from Social Security, and her 56 year old daughter who is a full-time live-in caregiver, basically sponging off of the paid-for mobile home and mom's SS check...
On that "wealthy" backdrop, they get high speed internet for $10 per month, and could afford $7.99 per month for streaming, but there's a relative with the "premium" two streams Netflix account at $10.99 per month who shares his password with them.
If you're wealthy enough to have a roof over your head and any kind of TV screen, you're wealthy enough to subscribe to Netflix.
🌻🌻 [google.com]
(Score: 1, Interesting) by Anonymous Coward on Wednesday July 18 2018, @05:49PM
I doubt that, especially considering the latest SIPP results. Only 78% of trackable households (those with a roof over their heads, among other permanence criteria) owned a computer, less than 70% a dishwasher, and 85% a clothes washer (and less own a dryer). Additionally, 10% live in a place with a "chronic" pest problem. A similar number had at least one utility disconnected, over 20% are without access to air conditioning. That doesn't even cover food and other "essential expenses" insecurity. I'm pretty sure that many of the people above would rather have what they are missing, rather than a Netflix subscription.
(Score: 1, Funny) by Anonymous Coward on Wednesday July 18 2018, @08:13PM
Stating 'we' is a bit presumptuous. Speak for yourself.
(Score: 2) by requerdanos on Wednesday July 18 2018, @04:48PM (3 children)
The growth that you speak of that's possible if the potential customer base grows with the population is not the growth that the business forecasters who are now apparently disappointed and surprised speak of.
They are talking about a continued, sustained growth rate that keeps pace with the growth has been occurring for some time.
You're talking about a reasonable, rational, reality-based growth rate that's much slower (and more sustainable) than what they are talking about. Because the reality-based one is slower, they count that one as "not growth" in the comparatively fast sense that they were talking about.
To my way of thinking, services like netflix have plenty of room for that faster growth if two conditions are met:
I am pretty sure these two conditions still exist, providing the strategy of taking customers (#2) away from competition (#1), but I don't think my way of thinking much resembles their way of thinking either.
(Score: 2) by JoeMerchant on Wednesday July 18 2018, @04:54PM (2 children)
Netflix's growth to-date has been ridiculously astounding, to expect it to continue like that forever is foolish. I agree, they will most likely rebound from the current setback and continue to grow "fast" in the future.
They basically combined "free bandwidth" of the internet with the killer bandwidth app: video entertainment, and managed to dominate the market.
🌻🌻 [google.com]
(Score: 0) by Anonymous Coward on Wednesday July 18 2018, @06:19PM (1 child)
What "rebound" are you talking about? They grew this quarter JUST AS FAST as they did in the same quarter last year.
The idiots on wall street are bitching because it didn't grow FASTER.
(Score: 2) by requerdanos on Wednesday July 18 2018, @07:34PM
So, if their growth did not grow, but only remained the same, THAT'S STAGNATION! I guess. Growth has to be growing for the growth to be growth. A slightly smaller growth rate, see, would be a SHRINKING growth rate, and everyone who forecasts for businesses and stock bettors and bookmakers knows that shrinking is bad for growth.
(Score: 4, Interesting) by Marand on Wednesday July 18 2018, @01:22PM (7 children)
I agree about preferring real competition to a monopoly, but Netflix is still something of an outsider/underdog in this space. One likely reason it's struggling to maintain growth is because its streaming content selection is being artificially limited by IP owners like Disney and BBC* pulling some or all of their content from Netflix, presumably with aspirations of starting their own walled-garden streaming services where they keep all the profit. Even when companies are playing ball and licensing content to Netflix they're pulling all sorts of weird shenanigans to undermine it, like removing entire seasons of television shows, or abruptly pulling movies and series, plus many only allow Netflix to stream older content. It's unfortunately working, too, because one of the most common complaints I see against Netflix is this lack of content, with the blame misplaced on Netflix instead of the rights holders.
If they get their way, we'll be separate premium subscription rates for each provider's walled-garden of content instead of paying a cable-esque middleman like Netflix. For some companies this is just speculation, but Disney, one of the biggest (if not the biggest) entertainment conglomerates has already announced it's ending its Netflix deal [collider.com], and in its place will launch two separate streaming services [nytimes.com] people will have to pay for. On top of that, their acquisition of Fox was recently approved [nytimes.com], which means even more content falls under their banner and will likely disappear from Netflix in favour of their own service.
This mirrors a similar shift that's been happening with video game industry, which was quicker to adopt online distribution than the television and film industry but slower to fragment, so that for a long time Steam had no competition and is still currently the biggest player. In response, game publishers started creating their own services, trying to avoid giving Valve a portion of their profits, but they took the same walled-garden approach, only selling products from their own catalogue. So, instead of being able to buy products from different publishers in a single marketplace, users now have to deal with a bunch of individual launchers and storefronts. EA was first to do this with Origin; once Origin was running, new games stopped appearing on Steam and started requiring the installation of Origin on the end-users' PCs. Blizzard never sold through Steam but otherwise took a similar approach as EA, rebranding its battle.net matchmaking system into a "social" platform and storefront that only sells its own games, banking on being big enough that everyone will just suck it up and deal with it. Epic has recently started doing the same, too, with its "Epic Launcher" that is required for games like Fortnite. Curiously, Ubisoft is the odd man out here: it has its own service and store, but still puts products on Steam for purchase. Using their products still requires using their custom service, but so far they've avoided the heavy-handed "buy through our storefront or get fucked" approach the others have.
Anyway, the point I'm getting at here is that, while I would love to see actual competition in these spaces, it doesn't seem like that is what's happening. The weakening of companies like Netflix and Steam looks likely to be worse for the consumer, because it's happening as a strategic move from IP owners trying to tighten their control over their content and squeeze even more money out of consumers.
* BBC is a weird case. They don't have a competing service yet, but they've already pulled some of their biggest content, like Doctor Who, leading to speculation that they plan to offer a similar paid streaming service. Meanwhile, they're still licensing other things like Peaky Blinders exclusively to Netflix.
(Score: 2) by takyon on Wednesday July 18 2018, @02:17PM (3 children)
BBC has already laid some of the groundwork with iPlayer.
[SIG] 10/28/2017: Soylent Upgrade v14 [soylentnews.org]
(Score: 2) by Whoever on Wednesday July 18 2018, @03:22PM (2 children)
... and now Britbox.
(Score: 2) by takyon on Wednesday July 18 2018, @03:46PM (1 child)
Don't think I'd heard of it before you mentioned it.
https://en.wikipedia.org/wiki/BritBox [wikipedia.org]
[SIG] 10/28/2017: Soylent Upgrade v14 [soylentnews.org]
(Score: 2) by Whoever on Thursday July 19 2018, @03:46AM
If you want to watch British TV programs and are in the USA or Canada, there is also Acorn.tv.
(Score: 2) by Phoenix666 on Wednesday July 18 2018, @03:56PM (2 children)
How much do advantage do competitors like Disney and HBO have over Netflix, though? They have old catalogues of content, but older viewers have already seen all that stuff a million times in scores of ways. Newer viewers have never heard of that stuff and don't care. It's the new hotness people care about, and if Netflix is producing more of that, faster, and winning the awards to prove it's just as good as any other producers', then they will still win the race.
Netflix has been burning cash with experimental original content. That part is true. On the other hand, they have analytics like no other content company ever before, or even still, so they know exactly how many people watch a new bit of content, exactly when during a show people stop watching, exactly what sorts of moments customer A tends to abandon an episode or series, and so on. Because of all that they have a much, much greater finger on the pulse of today's content consumer than practically any other player out there, with the possible exception of Google.
That, I would argue, gives them a huge competitive advantage. If they press that advantage and lure away all the top talent in the creative community, as they have been, then even companies like Disney will have a tall mountain to climb before they can knock off the king of the hill.
To do that, I suspect that a new player would have to invent a new way of interacting with content, the way that Netflix invented binge-watching. Perhaps interactive content could do it, but that's an entirely different way of thinking that would probably be better suited to a Dungeon Master than a traditional producer.
Washington DC delenda est.
(Score: 1) by oldmac31310 on Thursday July 19 2018, @02:15PM (1 child)
Netflix did not invent binge watching. Where did you get that silly notion?
(Score: 2) by Phoenix666 on Thursday July 19 2018, @02:25PM
They did invent it in its current form, as in, very easy. Before you had to buy DVD box sets or get boxes and boxes of VHS to do it, and then you had to get up and manually switch out the media. Before those, sometimes they ran marathons on TV like for James Bond movies, but they'd take 18 times longer to watch than the runtime of the actual show because of all the commercial breaks they interlarded it with.
But laying on your sofa, letting the streamed episodes automatically roll over, one to another to another, is definitely a Netflix innovation.
Washington DC delenda est.