Amid the pandemic and years prior, Netflix stood out as a titan of the entertainment industry and an integral part of Gen-Z culture. Now, however, it seems Netflix’s seat on the throne is being abdicated by fierce competition. As a professional procrastinator and long-time Netflix subscriber, I started to wonder what terrible administrative decisions caused watchers all over the world to subconsciously drift away from the once-remarkable service.
Just this year the Netflix stock has dropped a staggering 70%. The stock price of 600 dollars in January has recently dropped to under 200 dollars, losing the company over 50 billion dollars. Unless Netflix makes some vital changes, I do not foresee the stock approaching these numbers ever again. I have narrowed the causes of these rapidly decreasing numbers to four distinct reasons:
- Netflix’s approach to password sharing
- Increased streaming prices
- Loss of programs to competition
- Desire to return to normalcy from coronavirus restrictions.
First, Netflix has started to crack down on password sharing amongst all of its accounts, a crime that we are probably all guilty of. Netflix has stated directly that almost 100 million accounts are guilty of password sharing, which includes over 30 million Canadian and American accounts. Netflix has not stated how they will go about this; however, the public sentiment is not positive and is potentially serving as a catalyst for people’s decision to leave the service.
In addition to password sharing, Netflix has steadily increased its prices to the point where viewers question if the service is even worth all that money. Using data from recent years, American technology news site, the Verge, generated a graph depicting the rising prices over the years. From just 2014 to 2022, the price of Netflix’s premium plan has almost doubled in price. In 2014 it was a respectable $11.99 a month and now it is an egregious $19.99 a month. That’s a lot of money for a streaming website that doesn’t even have “The Office” in its catalog! For reference, Netflix’s standard subscription, which allows HD and two screens, is around 16 dollars, which to reiterate is more expensive than the premium subscription was a couple years prior. The thing that frustrates me the most is that Netflix’s basic plan doesn’t even offer HD and is $9.99 a month. Perhaps I am just spoiled, but this was flabbergasting to see. Watching stuff that is not in HD is almost as painful as failing Mr. Wallace’s chemistry class because of sig figs. With its steady increase in prices and its decaying catalog of shows, Netflix subscribers are slowly losing reasons to remain subscribed.
Additionally, with the rise of competitive streaming services, Netflix is rapidly losing a battle of attrition. Streaming services, notably Disney Plus and Hulu, seem to be capitalizing on Netflix’s blunders and loss of subscribers with their much more enticing catalogs. In addition to viewers switching services, companies are buying exclusive streaming rights to prodigious shows. One notable example of this, which I mentioned before, is Peacock’s rights to the show “The Office”, which I previously considered the crown jewel of Netflix.
Finally, one factor that must be acknowledged is the ending of the global pandemic. During the pandemic, where people were forced to stay inside, it was pretty evident that almost all of us became a bit lazier and indulged in a bit more television watching (not me though because I am never lazy or procrastinating). As the pandemic comes to a close, people’s lifestyles are diverting back to pre-pandemic times, which is reflected heavily on Netflix’s value.
I personally do not pay for a Netflix subscription—I am a dreaded password sharer, so I haven’t been forced to make this decision myself—however if it were my own money, I probably would cancel it. The prices are way too high for the content given. All in all, it is not surprising that Netflix has begun to fall from its glittering throne of streaming services. What will be interesting to see is how the company reacts to its fall from grace—will it continue its costly trend or reform its new policies? Reed Hastings, let’s see what you do.
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