5 Fun Ways Netflix Can Get Back to Growth (and 1 Rough Way)
After yesterday’s miss on subscriber estimates, the Netflix obituaries are rolling in. That’s absolutely premature for the #1 streaming service in the world, but the landscape is definitely shifting. For Netflix, competing with upstarts used to be like shooting fish in a barrel. Now it’s like trying to shoot one specific fish somewhere in the Gulf of Mexico while all the other fish are shooting back.
With over 207 million subscribers around the world, Netflix has the biggest soapbox in the streaming world. They’re not going away anytime soon, but they need to innovate to keep up. Here are some ways they can fight back against the other tech titans.
Invest in creators over IP
The success of Disney+ and its mighty catalog put the world on notice that intellectual property was absurdly valuable in the streaming wars. While Disney has Marvel and Star Wars and the Muppets and Pixar and “The Simpsons” and the Alien and Die Hard franchises, those franchises were born several decades ago. Nostalgia is a powerful driver of adoption, but it will only get you so far. (That newest “Star Wars” trilogy is not going to age well, even though it did brisk business at the box office.)
We need more new stories and characters. Netflix has roped in Shonda Rhimes to great success with “Bridgerton,” while Ryan Murphy and Matt Groening haven’t quite kept pace with “The Politician” and “Disenchantment,” respectively. But this model should provide success as long as Netflix can identify the right partners.
It will also do well to give younger storytellers a shot. Matt Weiner worked on “The Sopranos” before he came up with “Mad Men.” Vince Gilligan worked on “The X-Files” before giving us “Breaking Bad.” Netflix should look to raid the cupboards of today’s best shows, identify the next generation of talent, and turn them loose to create something original. It’s difficult to create two masterpieces in a lifetime, so the company would be better off looking for someone talented who hasn’t yet hit their first home run.
“The Irishman” was nice and all, but you’re not going to build a future on the back of a 78-year-old Martin Scorsese.
Try the Blumhouse model
Blumhouse has a fascinating business model. In 2007, they turned “Paranormal Activity” from a $15,000 production into a $193 million blockbuster. That pattern continues today, offering creators small budgets and near-total creative control. The result? Incredible movies like “Whiplash” and “Get Out.” Today, Damien Chazelle and Jordan Peele can do whatever they want. But where would they be without Blumhouse making a gamble on their talent?
Yes, that model results in a lot of trash, but the hits should provide enough benefit that it’s worth the gamble.
Netflix would be well served to turn on the fire hose and churn out a ton of low budget content in the hands of some talented newcomers. It worked well with Tim Robinson’s “I Think You Should Leave.” There’s also no need to hand over an entire series. Wouldn’t you like to see the kind of movie Donald Glover would create? Or a poetry spotlight led by Amanda Gorman? Or a brand new toy showcase headlined by one of those YouTube toy unboxing kids?
Look back to MTV
When you look at the streaming landscape, no one offers much by the way of music video content anymore. Perhaps the expectation is that music fans will stream audio via Spotify and watch videos on YouTube. But there’s an opportunity elsewhere. Consider MTV’s “Unplugged” series, which was a unique spotlight for the era’s biggest artists to play acoustic covers of their hits. Netflix could offer a unique opportunity to artists to highlight their work in a similar way. “Springsteen on Broadway” was a promising start, but the service should focus on younger artists.
The series “Song Exploder” is truly great, but there are so few episodes. There’s a tremendous opportunity to highlight musicians and their work and give the artists a platform to play for 200 million people.
Netflix could even dabble with airing live concerts, which could become appointment viewing around the world. Why not offer a Saturday night showcase to a different DJ every week?
The company has already aped the early Comedy Central model by spending a lot of money for stand-up comedy specials. Now it’s time to push money toward musicians.
Netflix, we’re begging you, add a secondary audio for director’s commentaries. Tack on every behind-the-scenes and making-of documentary related to any of your films. Let us see the outtakes. Offer a “Pop-Up Video”-style option that displays movie trivia throughout the course of a movie. All of this would help fans engage more deeply with the films and shows they love.
Change the release patterns
Netflix is already experimenting with this, but it would be wise to abandon the binge model with strategic properties. Part of the Disney+ success story is that the entire audience can only proceed at Disney’s pace. In the week after a new “Mandalorian” or “WandaVision” episode drops, the meme factory spins up on social media, generating FOMO for people who didn’t watch right away.
While entirely new shows probably benefit from the binge, established series would serve Netflix better if they had a slower rollout.
Tighten the screws on password sharing
In yesterday’s earnings call, the Netflix team ducked and dodged when pressed about a password-sharing crackdown. Netflix knows that the backlash would be ferocious if they made it difficult to share accounts, but there is the very real fact that passwords are shared and sometimes even resold. That’s cutting into their revenue. If Netflix wanted to be strictly mercenary, they could devise a way to make sharing nearly impossible. And while that would force some folks to buy their own subscription, Netflix might lose other subscribers in the process.
Perhaps there’s a middle ground where Netflix could create a “family and friends” tier that allows limited sharing while locking down accounts on a single-household tier.
No doubt, the knives are out for Netflix. Studios are jealously guarding their franchises. The Sony deal provides at least some temporary relief. But unless Netflix starts churning out 5-7 “Stranger Things”-sized hits each year, they might be approaching their ceiling.