Is Netflix stalling? subscriber growth is slowing and competition is increasing, what’s next?
There is a mixed bag of news for Netflix and the operators carrying their traffic would do well to pay attention. Is streaming service Netflix stalling despite positive figures in its latest financial results? Industry analysts think so and what about the Netflix Throttling scandal?
Netflix revealed revenue of 1.8 billion US dollars for the first quarter of 2016, with membership numbers rising more than 6.7 million to 81.5 million – up from just over 62 million in a year. The number of new subscribers was a record in a single quarter for the company, but number of new customers joining the service to slow in the next quarter. The big news is Netflix stalling on new subscribers! The expected numbers are only 2.5M for the next Q.
Well now they are not alone out there, competition has caught up Amazon’s Prime Video service, Sky’s Now TV, and the range of on-demand and online store are all fighting with Netflix for market share.
Netflix also recently announced a price increase for early adopters of the service, who were receiving the platform’s mid-level package lower-tier price. They are now being brought in line with the prices new subscribers are offered, meaning an increase of $2:00 a month for some to keep the same package.
The average time spent watching streaming services nearly doubled between 2014 and 2015 – rising from 40 minutes a week to 77 – as the number of services on offer expanded rapidly. Joe Rundle, from financial firm ETX Capital, suggested that a Netflix stalling could make it a “takeover target” if competition continues to flood the market. Rumors say Disney are watching closely and could be tempted to take over Netflix if the price is right.
A big eye-opener for Netflix was Amazon’s Prime Instant Video that let customers save movies and TV shows for viewing when not linked up to an internet connection, but Netflix has thus far resisted calls to allow the functionality.
Netflix CEO Redd Hastings was asked about potential offline playback by Recode on a conference call, he replied, “We should keep an open mind on this. We’ve been so focused on click-and-watch and the beauty and simplicity of streaming. But as we expand around the world, where we see an uneven set of networks, it’s something we should keep an open mind about.”
Netflix’s international expansion might be driving the consideration, but it would also benefit those of us who have eaten up our data plans when away from home, or sobbed into our portable devices when stuck on planes, trains, and anywhere else that high-quality connectivity tends not to reach. It’s been hard, obviously.
In the past, Netflix’s response has been firmly against the idea, which may not be due to technical constraints but rather the need to have licensing agreements in place for the functionality. As Recode suggests, that shouldn’t be a significant problem with the company’s own original offerings, but content from external providers might not be a sure thing.
Still, Hastings’ response suggests that minds are changing at Netflix, or at least open to the change – and if that means eventually binge-watching Daredevil or Master of None on an international flight instead of suffering through whichever junk the airline has on offer, that’s good news to our ears.