Instead of filling out its catalog, however, Netflix is trying to diversify beyond video. For example, strengthening the staff of game service Released in November 2021. “They will be pouring money into branching out into different types of content to be as much of a quadrant service as possible,” says Alexander. but also people over the age of 25. “But at the same time, they are aware the competition at this time is stronger than ever. They need to find a way back to Netflix, and figure out how to revolutionize parts of the industry.”
But that costs money – which is why price increases have been adopted in many parts of the world. “From an analyst’s point of view, SVOD still has value for money, even as prices rise,” said Gunnarsson. “You can watch as much content as you want with two pints in the pub and get unlimited access to all of it.” According to Omdia, the average UK household subscribes to two services — half the number in the US. Currently, Netflix, like Amazon, is seen as a stationary service — one that users constantly have, switching to other, smaller competing services as they can afford to do so. “Netflix is the Andrew A. Rosen, founder of online insights consulting firm Parqor, said. But that can always change.
With 75 million households already subscribed to Netflix in the United States, Alexander believes the service is close to peaking in the country when it comes to adoption. “What you’re really trying to do at that point is re-engage customers who might have left the Paramount+ subscription for a month or whatever,” she said. Original content on Netflix, while some may find it overwhelming, generally falls into two groups: reality TV and children’s entertainment that keep existing subscribers satisfied and action, drama, and sci-fi shows that re-engage subscribers who’ve done their business elsewhere. But lapsed subscribers are relatively rare for Netflix, Rosen said: “Their market churn in the US is 2.2%,” he said. “Their turmoil is at a low point.”
And while there’s still plenty of room to grow in other markets, those users tend to bring in Netflix and other streaming services less money per customer than they do in the United States, the United States, and the United States. UK or elsewhere. Alexander said Disney+ Hotstar’s average revenue per customer in India, Brazil or Mexico is about $1.06, compared with $6.13 in the United States. “It’s a huge difference when you look at the tens of millions of subscribers,” she said. And to make more money in a market where subscriber growth slows, like in the US and UK, you have to start raising prices.
The challenge that remains, however, is that raising prices at a time of macroeconomic uncertainty is a risky business. Rising gas prices, rising heating costs, and a squeeze in living standards due to runaway inflation all have an impact on discretionary spending — which certainly includes streaming video providers. But there’s another way to make money while retaining and building a customer base: tiered ad-supported services. In June 2021, HBO Max is out a stripped-down, ad-supported version of the streaming service with $5 off the full $14.99 per month product. Disney+ is launching a grant ad support later this year, joining Peacock, Paramount+ and Discovery+. “Logically, the general feeling is that the competition will require more streaming services to move towards hybrid AVOD. [advertising-based video on demand]/SVOD model,” says Gunnarsson.
