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Netflix app downloads are falling, streaming has its downside – TVREV

Netflix app downloads are falling, streaming has its downside – TVREV

1. Download Netflix Apps

In addition to Netflix’s ever-growing list of issues, there are reports that the number of downloads of the app is declining.

According to a note from the investment company Evercore ISI, Netflix downloads in June 2022 decreased by 5% YOY and 2% MOM, with the largest annual declines in APAC (-16%) and USCAN (-13%).

On the bright side, downloads in EMEA increased by 8%.

Netflix shares have fallen as Wall Street takes in their halted subscriber growth, recent layoffs, seemingly hasty decisions to launch an ad-supported model and new energetic competition, and so this is just the latest bad news for the company.

Why it matters

Many of Netflix’s problems are due to the company not being able to get ahead of the media spin cycle.

What are routinely billed as “massive subscriber losses” were less than a tenth of a percent of their subscriber base – hardly “massive” – ​​and that number would have been in black if Netflix had not supported the Ukrainian war effort by shutting down the Russian the business and its 700,000 subscribers.

When it comes to downloading app downloads, this, like the decision to launch an ad-supported model and the declining subscriber growth is inevitable, and TBH, I’m more surprised that people are surprised than I am at the fact that it happened.

Why? Because in June 2022, almost everyone who wants Netflix has it already. About two-thirds of all U.S. households subscribe to the service, which can be close to the limit for people who want a $ 15-a-month streaming TV service, no matter how great it may be. (US smartphone penetration is around 80%, just to throw out a figure for comparison.)

Also – and this is the key to interpreting these statistics – pretty much every new TV sold these days is a smart TV that already has Netflix installed. So there is no need to download.

That note holds true when you look at which services are seeing a growth in downloads: Paramount +, Disney + and HBO Max. Not only are these apps growing in popularity, but, unlike Netflix, they will hardly be pre-installed in older smart TVs, and viewers will download them, you know, so they can watch them.

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(It is also unclear whether these download statistics are for the mobile app, in which case they will be even more easily rejected given it, according to Conviva’s latest Status of streaming report83% of OTT viewing time in North America takes place on an actual television set.)

So not much to see here beyond another set of statistics that seems to prove something it actually does not.

That does not mean that Netflix does not have problems.

Their biggest problem right now is that their “all things to all people” strategy to produce shows that can appeal to different niche audiences is not succeeding, as the perception grows that much of what is on Netflix beyond Stranger Things is not worth seeing, that their library is fading compared to most of the FASTs and (most importantly) their competitors are pumping out the really good programs you want to see.

After all, that’s what it’s all about – who has the really good programs, the viewers want to spend time and money on.

It’s also a secondary issue – the worse PR Netflix gets, the harder it will be for them to convince top talent to work with them.

For example, if I’m Quentin Tarantino and I’m looking to make my first ever entry on TV and I’m still reading about how Netflix is ​​in trouble, I’ll be far less inclined to sign a deal with them than I was. a year ago.

Which then is part of the whole problem of “not much good show” in what risks becoming what in other parts of the business is known as a “flywheel.”


What you need to do with it

If you are Netflix, you need to do more aggressive damage control. The media attention on Stranger Things got you coverage for a few weeks, but in the end you have to deal with the situation, and here the best defense will be a good offensive: explain that you are as well rooted as Top Dog that of course your subscriber number goes down, but there is no reason to alarm. Rather, it is proof that everyone else is just playing catchup and the key figure to look at is still the total number of subscribers.

Or rather, the total number of subscribers, minus virtually free Indian services that have IPL cricket subscribers.

There should be some ways to curb investor fears.

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I also wanted to contact all the journalists who talk about the “massive loss of subscribers” and correct them.

But it’s just me.

2. Streaming has the back end

The shift to streaming not only affects the advertising and distribution pages of the TV industry. It also affects the creative end, both in large and small ways.

This was brought home by a speech given by Jeff Sagansky, a well-known producer / investor and former president of CBS at NATPE this year and doubled down to last week, the lambasting industry to impose deals that eliminate almost all backend profits that actors, writers and producers have been working against for years.

To know, while Jennifer Aniston and the other Friends all earned a good amount of money during the implementation of the show, they accumulated generational wealth when the show went into syndication.

Sagansky estimates that the creative community loses a total of around $ 1.5 billion each year due to the disappearing backend.

Why it matters

While this may seem like a boom time for those who are on the creative end of television, with over 500 new original series produced each year, the shift has proved to be very disruptive.

First, there are schedules.

Although TV was never a stable business, everyone connected to a TV series from September to June could be guaranteed something close to year-round work. This was a big deal for creatives with marriages and families where mortgages had to be paid, holidays that had to be synchronized with school holidays, Little League teams had to be trained, etc.

What I hear from friends and acquaintances in this regard is that although there are several options, streaming has added a huge dose of uncertainty to their lives.

The shows are for eight to ten episodes, and therefore the recording lasts only three or four months, which means that they have to fight for a new gig several times a year. So, if it is a second season of a streaming program, it is not on any kind of regular schedule, which means it can be resumed nine months later or nineteen. And while streaming often pays off better, the ultimate gross for an eight-episode streaming series is still nowhere near what it is for a 24-episode network in prime time.

“It just feels like I’m climbing all the time” is a common chorus.

All that arguing would not feel quite so heavy if there was still potential for a pot of gold at the end of the rainbow.

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But as Sagansky points out, it eliminates the backend – the money creative talent earns when shows are sold to syndicate or abroad – eliminates these pots of gold and thus the incentive many people have to work in television.

And that was a big incentive.

Although most network’s prime time series lasted no more than a season or two, the hope was always that you would join a show that lasted at least five seasons – the magic number for a show to be viable for syndication. was 100 episodes – since the backend was where you wanted to make your real money, and when all the late nights and notes from disruptive network leaders would eventually prove worth it.

Unfortunately, Sagansky may be howling at the moon here.

Power services say they need to eliminate backend payments to stay profitable, given that they do not receive the millions (often billions) in transportation and retransmission fees that broadcast and cable networks receive, and that they need to recoup the deficit somewhere.

Their argument is that they are taking the risk on the show and therefore they should get the reward.

That, and it’s hard to feel bad if people “only” earn hundreds of thousands as opposed to millions.

What you need to do with it

If you are the streaming service (all of you, not just one), you need to find a way to bring back the backend, at least something.

The alternative is what happened to the creative end of advertising where lower wages and poorer working conditions drove away much of the talent, which led to agencies justifying paying lower wages because production was no longer fantastic, which created a kind of flywheel effect the industry still has not recovered. (Do you sense a theme here?)

So follow Sagansky’s cleverly worded complaint that “we are in a golden age of content production and the dark age of creative profit sharing” and share some of the riches before driving away (to really murder a metaphor) the geese that lay your golden eggs.

It beats relying on Metaverse and crypto.

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