Netflix movies and series aren’t what they used to be: the numbers that show you the giant is being “eaten” by the competition

For about a year now, since competition has become very fierce on the globally available streaming platform side, Netflix has been suffering a lot. In theory, it has tried to remedy this worrying trend by introducing a cheaper subscription with ads. Unfortunately, it turns out that it’s not the price that’s the problem, but the quality of the content relative to the alternatives on HBO Max and Disney+.

Netflix is preparing to announce its financial results for the last fiscal quarter, and the forecasts are not optimistic. Apparently, it will announce its slowest quarter-on-quarter revenue growth ever, for the simple fact that in the US, the giant’s biggest market, ad-supported subscriptions have been far from a resounding success. As a result, it’s not out of the question that in 2023 we’ll see a reduction in content spend.

What’s happening with Netflix

According to data obtained by Reuters on the subject, although Netflix was the first company to make waves in streaming, at the moment the giant is facing higher consumer spending, rising costs to fund production and stiffer competition from Disney+, Amazon Prime Video and HBO, according to News.co.uk.

In theory, the company had pinned its hopes on the launch of the cheaper ad-supported subscription, but it hasn’t generated a boom in new subscriptions. In the end, analysts expect Netflix to have added 4.5 million subscribers in the fourth quarter – the lowest growth for the holiday period in 2014. A year ago, the company added 8.3 million subscribers in the same time period.

For reference, Netflix’s ad-supported subscription costs $6.99 a month in the U.S., and it doesn’t even have access to all the movies and shows in the standard one. Unfortunately, the price difference isn’t big enough to win a significant number of customers in the US and Canada.

“Looking at the saturation of the market and the variety of different options available and the fact that the price is not necessarily significantly below the competition, there are some challenges in reaching those subscriber targets,” said Jamie Lumley, analyst at Third Bridge.

Over the next two years, Netflix is expected to spend about $17 billion annually on content, but those numbers are expected to decline as the business model is no longer as efficient. “When debt was cheap, you could go out and borrow a lot of money and invest it in content. Given current interest rates, Netflix will have to be very selective about what content it approves and how it would fund it,” said Shahid Khan, partner and global head of media and entertainment at Arthur D. Little.