Netflix has come so far as a premium distribution-to-consumer channel for video services that neither the pandemic nor competition can touch it.
Netflix is one of the few businesses that witnessed a lift from the global pandemic. Around the world, people in confinement found solace and comfort in OTT platforms. Relying on digital services for entertainment saw a global surge while the audience is left with no choice but to be couch potatoes! Hence, major OTT players like Netflix, Amazon Prime, Disney+, Peacock, and more had to up their game to stay ahead of the consumption curve.
When the world governments asked major platforms to decrease the bit rate, it was an easier problem to solve than shut productions. The film production shutdowns hurt TV and movie studios more than OTT platforms. However, none of it hurt the giant called Netflix.
Netflix is entertaining people since 1997. In the past decade, it sunk its teeth in the streaming sector and developing a global audience. That further establishes the brand as a premium distribution-to-consumer channel for video services. Today, Netflix has a huge library of sourced and original content.
Therefore, when the pandemic hit and people fell to binge-watch, the streaming giant added 15 million new subscribers in the quarter. While the shoots resume for new seasons as well as new shows, Netflix’s shareholder letter does address the issue. The letter reads,
While our productions are largely paused around the world, we benefit from a large pipeline of content that was either complete or ready for launch or in post-production when filming stopped. Therefore, while we are certainly impacted by the global production pause, we expect to continue to be able to provide a terrific variety of new titles throughout 2020 and 2021.
The giant has an edge over other platforms due to its release strategy. The new season of series are released in one go. This means they have the entire season ready to release which saves them inconsistency. Hence, they didn’t face the same issue as networks that needed to finish productions on few more episodes.
Watch: Disney+, HBOMax, Netflix, Apple TV+, Amazon Prime, Peacock
While it is a tough long road ahead for film productions to make a safe and capacitated return, the streaming giant looks well-prepared to sail through the storm.
In contrast to Netflix, Disney+ has an impressive catalogue of movies and shows. The content caters to sustained membership of family audience. Disney plans to increase the subscription by adding Marvel Cinematic Universe content to the platform with shows like WandaVision, Loki, The Flacon and The Winter Soldier among others. However, their plans were derailed due to the pandemic. The Flacon and The Winter Soldier has been delayed to 2021 while Marvel’s only offering for this year remains the WandaVision series.
Furthermore, WB’s new platform HBO Max has enjoyed initial subscriptions as well as made headlines. However, the crowd grabbing content like Zack Snyder’s Justice League Cut and Matt Reeves’ Batman prequel show will see the light of the day in 2021.
All the while to boost its content offerings, Netflix is acquiring rights to various movies like Aaron Sorkin’s “The Trial of the Chicago 7” and the global streaming rights, excluding U.S. and China, of “The SpongeBob Movie: Sponge on the Run”. It recently released Lionsgate’s Enola Holmes starring Millie Bobby Brown, Henry Cavill and Sam Claflin. Furthermore, the giant has all three seasons of YouTube Original Cobra Kai.
In its Second-quarter earnings release Netflix said, “For 2021, based on our current plan, we expect the paused productions will lead to a more second-half weighted content slate in terms of our big titles, although we anticipate the total number of originals for the full year will still be higher than 2020,”
With titles like Tiger King, Space Force (Steve Carell), Extraction (Chris Hemsworth) and its animated feature The Willoughbys – Netflix has made enough noise already this year.
Not only the content but even in global market share there’s not much competition for Netflix. As per Forbes, outside the US market, Netflix outperforms globally with 70-87% of subscription OTT video service users in European English-speaking countries and 55-64% of non-English speaking countries. Furthermore, India and Asia-Pacific are high growth markets for Netflix. Though pricing could be an issue due to high rates of piracy and Netflix’s model depends on subscriptions, not on increased consumption.
While the company added 15.8 million new subscriptions in Quarter 1 beating its own record of 7 million new users. However, in its Shareholder’s Letter management mentions caution for Q3 and Q4. The management used the words guess and guesswork for the next quarter guidance, which it places at 7.5 million new memberships.
Despite being wary, Netflix is still scheduling to spend a healthy $17.3 billion on original content by the time 2020 closes. This means that 2021 second half would be full of hefty titles from Netflix by the time Disney+ and HBO Max only start to penetrate the market. Surely, Netflix proves content is the king!