As the live streaming market evolves, Netflix is faced with new challenges that it must address. The streaming giant continues to face stiff competition from the rise of new streaming platforms like Amazon Prime Video and Apple TV+. Statistics show that by 2020, over 200 million had subscribed to Amazon Prime, and a further 50 million may follow by 2027.
In the UK, Netflix is the most popular streaming service, with over 15m subscribers. After the company raised its prices in 2022 by 14%, it managed to increase its revenues by 12% amid a reduced number of subscriptions. Some products whose prices were increased include the premium packs, which were raised from £13.99 to £15.99.
Netflix now needs to fend off a challenge from platforms like Paramount Plus, which offers cheaper ad tiers. For instance, Paramount Plus offers a standard tier at £6.99, while Netflix offers it at £7.99 monthly. By paying £69.90 annually at Paramount, viewers can save up to £12, thus helping the company gain more customers.
In October 2023, Netflix added another price increase. Viewers in the UK must now pay £7.99 and £17.99 for standard and premium plans, respectively. If Netflix continues increasing prices amid high inflation, it will give its counterparts competitive advantages. What, then, should be done?
A Wider Focus: International Growth
Diversification of content will allow Netflix to target a wider audience. Expansion of services and products has become a trend in many online businesses. For instance, many online casinos offer multiple services like live casinos, slots, and table games on their platforms to attract players with varied interests. A casino platform with a diverse digital games collection will fit many players’ preferences, resulting in a larger customer base.
Most streaming platforms focus on making their existing customer pool more profitable while seeking ways to draw in new audiences. With increased domestic competition, Netflix can target Asia Pacific, EMEA, and Latin American markets by releasing local content that caters to the preferences of these regions.
Netflix can explore new markets and change content to meet regional preferences and tastes. In 2021, the platform released the South Korean megahit Squid Game, which streamed for 1.65 billion hours within 28 days. Bloomberg News suggested that the show collected approximately $891 million in “impact value” for the company. Crafting more localised content will therefore result in significant leaps for the streaming giant.
Engaging and Original Content
Companies like Apple TV+ spend considerable amounts on creating original yet engaging content. For instance, Apple struck a 10-year deal with the MLS worth $2.5 billion, allowing Apple users to stream all games live without interruption in over 100 countries. With such trends emerging, Netflix must seek ways of crafting engaging content that will keep its customer retention high.
Netflix should also bank on more original content, following the well-tested path many streaming platforms are taking. The streaming company can also borrow Amazon’s strategy of interacting with focus groups in different regions and conducting surveys to understand market needs.
Netflix thus faces a formidable rival in emerging companies like Apple TV, which are chasing the same markets the streaming giant has captured. The company can, however, implement strategies to retain its hold on the market, for instance, investing in generating original content that captivates viewers.
