Major changes are affecting both the leading platform and streaming services in general.
The practice of cord-cutting is moving from a novel customer option to the primary method of home entertainment viewing. The streaming service industry is morphing into a new growth phase that is seeing enhanced competition as well as constantly evolving customer preferences. As a result, the pioneering entity Netflix is both making needed adjustments in the market shift and experiencing internal alterations.
Two major Netflix officers have left the company. Stephen Bruno was a vice president as part of the company’s creative marketing division and has joined now with MGM to serve as that studio’s Chief Marketing Officer. At the same time, Netflix CMO Kelly Bennett is leaving the company once a replacement has been announced. Meanwhile, the company has also eliminated its entire global marketing team.
These moves are emblematic of the company being forward thinking as it faces some major shifts in the industry it has dominated, if not outright created. More streaming services abound and continue to arrive, and meanwhile, the consumer landscape is also going through major alterations. Customers are becoming more selective than in the past, and the competition will be fighting for a far more discerning audience.
For the past few years, Netflix has been on a massive spending spree. The content provider has been hyperactive in gobbling up content. The company has been acquiring programming, producing its own shows, purchasing films on the film market, and producing its own motion pictures at a furious, and expensive rate. This has been done to both expand its reach as well as preparing for coming challenges.
One of the biggest looming threats, though long known to be arriving, has just become cemented. The deal of Disney purchasing 21st Century Fox has been completed. That multi-billion dollar merger was made with the specific purpose of developing its own streaming platform to challenge Netflix directly. The combined libraries of film titles and television productions from Disney and Fox will automatically establish it as a competitor when that new service is made available later this fall.
A number of other outlets have been entering the streaming arena. Independent networks, like HBO and CBS, have had their own services with exclusive content, as have studios such as DC Comics. Next week, Comcast enters the fray with its Xfinity Flex, available to its online subscribers. Apple is getting set to offer up its own streaming platform later this year. These companies have endeavored to establish themselves ahead of the arrival of Disney’s venture, hoping to retain customer interest once they are sampled.
That desire is sound, as we are already witnessing a shift in the viewing habits of customers. For a time, people who committed to streaming would gladly sign up for multiple services simultaneously, as the cost of overlapping services was still cheaper than the cable bill they had dispatched. Now, a threshold has been reached, as the first quarter of 2019 shows a drop in both the number of services customers subscribe to, as well as the amount they spend on streaming services.
The crowded field of providers has also brought another change to the make up Netflix. The library of Netflix is now comprised of mostly original content – 51% – over that of acquired new titles from outside providers. This has happened as a twofold process. Partly it is due to that aggressive purchasing taking place, and also to having those competitors pulling titles for their own services. Hulu, and Amazon, for example, are mostly dependent on acquired content over original productions.
One of the bigger losses incurred by Netflix are those titles from the Marvel and Star Wars franchises. One of the many popular offerings had been the number of original Marvel series, such as “Daredevil”, “Luke Cage”, “Jennifer Jones”, and “Punisher”. Over the past few months, those series had been steadily announced as being canceled by Netflix. This is directly due to Disney wanting the branding of Marvel to be exclusive to its upcoming service. Though no announcement has been made, it is expected in the future those series may become resurrected on the new streaming outlet someday.
Netflix has been able to prepare for this coming challenge, so the company is stocking up its own library and becoming recognized as a portal for quality content. The coming years should become far more of a challenge for those less established and possessing far less capital to compete with the streaming titans.