Will Netflix stop overbearing releases like Stranger Things? Experts weigh in
A scene from Netflix’s “Stranger Things”.
Can Netflix drop its binge-release model? Strange things have happened.
The all-in-one TV strategy release strategy is a cornerstone of the Netflix strategy. The first seven episodes of “Stranger Things”, which all premiered on May 27, broke records. It was the biggest premiere weekend ever for an English-language TV show on the service with almost 287 million hours watched.
Despite the success of its series, Netflix is struggling to get subscriber growth started. Such an exaggerated strategy is facing a new investigation as the company is looking for ways to better retain the subscriber base.
“With Netflix, or anyone, never say never,” said Peter Csathy, founder and chairman of Creative Media. “Just like they said ‘no way, no advertising’, do not assume that excessive viewing is forever.” He added: “Binge viewing is on the table.”
Investors are questioning Netflix’s ability to handle subscriber losses and increasing competition in the streaming business. The streamer’s share fell last year from $ 700 per share to around $ 160. The company reported a loss of 200,000 global subscribers during the first quarter results report in April. It also warned of deeper problems ahead, predicting that it would lose around 2 million global paid subscribers during the second quarter.
Now Netflix is reconsidering several core principles that once made it the king of the nascent streaming world. Co-CEO Reed Hastings said the company is exploring more affordable, ad-supported levels in an effort to bring in new subscribers after years of opposition to advertising on the platform.
Those familiar with the streaming area suggest that several changes may come, including a stronger focus on franchise content and even a shift to staggered releases of new episodic content.
Netflix has toyed with different release models, mostly due to pandemic-related production delays, noting that splitting seasons into two parts can be a “satisfyingly long overdue experience” for subscribers. Nevertheless, the company has not given any indication that it will move away from releasing all episodes of screenplays at once. Instead, decisions will be made on a case-by-case basis.
Netflix declined to comment.
“When Netflix started, it really had the field to itself,” said Robert Thompson, a professor at Syracuse University and a pop culture expert. “One of the reasons they started bingeing was to get people talking and really launching their new original programming. They succeeded. Now, however, it’s a whole different matter.”
Netflix no longer has licensed content such as “The Office” or “Friends”, which made subscribers come back month after month to watch repeat. Instead, it has several high-profile shows, such as “Stranger Things”, “Bridgerton” and “The Witcher” – in addition to an expansive library of series that have not reached the same level of prestige or popularity.
Thompson noted that all programs released on streaming services eventually become redundant. It is the way they are first introduced to the public that the platforms control.
To excessively or not excessively
“Dropping everything at once, the Netflix model, increases the binge value,” said Nick Cicero, vice president of strategy at data analytics firm Conviva. “This allows customers to consume at their own pace, but depends on a deep catalog.”
“The downside,” he said, “is week after week, which is designed to bring people back and give them something to look forward to. It’s a completely different model of marketing.”
On services like Disney +, HBO Max and Hulu, releases of individual episodes keep the audience hooked for weeks, which means less churn on a monthly basis. Meanwhile, Netflix subscribers can watch an entire season of a show they are interested in and then leave the service at the end of the month.
In this image illustration, the Netflix logo is displayed on a smartphone screen, with a graphical representation of the stock market in the background.
Sweep pictures | Lightrocket | Getty pictures
Year-round content allows services like Disney to entice subscribers to join each month, but also persuade them to pay for an annual subscription in advance. The company’s Disney + platform uses the two largest franchises – Star Wars and Marvel – to get subscribers to come back.
The company published “The Book of Boba Fat”, which ran from the end of December 2021 to the beginning of February. Then add “Moon Knight” in late March, which went to early May. So in late May, it released “Obi-Wan Kenobi”, which will continue until the end of June. “Ms. Marvel” arrived in early June and will run until the end of July. August has the release of “She-Hulk”, which carries episodes through October, and then “Andor”, which will end its first season in November.
So in December, Disney + releases the Christmas special «Guardians of the Galaxy». By astonishing these releases, the company can entice Star Wars fans and Marvel fans to stick to the service in the long run.
“With Netflix, it’s super easy to join for three to six months and then go for three to six months,” said Michael Pachter, an analyst at Wedbush. “When ‘Stranger Things’ is over and ‘Ozark’ is over, what now?”
In recent years, Netflix has experimented with weekly releases for some reality shows, but has not tried this strategy with scripts.
“We basically believe that we want to give our members the choice in how they look,” said Peter Friedlander, Netflix’s screenwriter for the United States and Canada, earlier this month. “And so giving them the opportunity to see as much as they want to see in these scripts when they see it is still fundamental to what we want to offer.”
However, Netflix has tried to split seasons into two or parts to spread them out. The fourth and final season of “Ozark” was split in two, as was the final season of “Stranger Things”. The final two episodes of “Stranger Things” season four, including its 2.5-hour finale, begin streaming on July 1st.
“Splitting the seasons actually had a practical reason before, which was the Covid delays and all the projects that in a way led us to split some of the seasons,” said co-CEO Ted Sarandos during the company’s first quarter earnings report in April. “But what we found is that fans like both.”
“So being able to share it gives them a really satisfying binge experience for those people who want the really satisfying long binge experience,” he said. “And then to be able to deliver a follow-up season in a few months versus, in some cases, the new season of ‘Stranger Things’ comes almost three years after the last or more than two anyway.”
Netflix has long stuck to its all-in-one model because of its subscribers, which it says will have more control over when and how they watch content. Programs such as “Maid”, “Inventing Anna”, “The Lincoln Lawyer” and “Squid Game” all held the top 10 on the streaming service for several weeks, and show that Netflix series can have a long life on the service when the word of mouth travels. to new target groups.
Still, Netflix can learn a lot from staggered releases of “Ozark” and “Stranger Things” to find out if there are other screenwriters who will benefit from this strategy.
Pachter suggested that Netflix could take a signal from Amazon and release three episodes a week.
“It’s okay to say, ‘We’re disruptive, but there are things our competitors do that we admire and we respect them and we think they’re doing it right,” Pachter said. “There’s not a cop out there.”
Netflix’s all-in-one publishing strategy may set it apart from other streaming services, but it also means it must increase content production to fill the gaps between series. Instead of having 30 shows spread over the year, for example, it needs 300, Pachter said.
“Netflix’s data dump means they need to do more content to minimize churn,” he said. “I think they will be far more successful if they focus on more quality than more quantity.”
For years, the streaming service used licensing agreements with networks and studios to fill the library with long-running and popular series such as “Parks and Recreation,” “Schitt’s Creek,” “Mad Men” and a series of Marvel-based superhero shows. .
These contracts have been terminated and the shows are now on other streamers. In another battle, Netflix is about to lose 12 seasons of CBS ‘”Criminal Minds” by the end of the month. “New Girl”, another pin in the Netflix collection, is expected to leave the platform in 2023.
“Breaking Bad”, “Grey’s Anatomy”, “NCIS” and “Supernatural” are staying for the time being.
This type of series, which has a number of seasons or dozens of episodes, has been an important driver for viewer traffic on the streaming service for years. Now Netflix is more dependent on its own original content, and leans heavily on agreements on content creation and surprise hits such as “Squid Game” and “Love is Blind”.
“Netflix has a lot of content, but the iconic evergreen content has not made it into the directories of the other streaming services out there,” said Cicero.
Relatively new streamers like Disney and NBCUniversal’s Peacock have decades of older content to fill their libraries with. That’s why Netflix signed a deal to be the first streaming site for new Sony releases back in 2021.
That’s also why Creative’s Csathy believes Netflix should focus on developing franchises or buying the rights to already established franchises.
“Instead of throwing all the titles against the wall to see what’s sticking with consumers, focus on franchise and name brands,” Csathy said. “The smartest games are those that have name recognition and built-in audiences.”
“Wall Street will reward those who come out with a public strategy unless there is more,” he added.
Still, there are those who do not believe Netflix will be so quick to revise its established strategy.
“I think people in our industry tend to forget that this is not a size that suits everyone,” said Dan Rayburn, a media and streaming analyst. “I do not think Netflix will say that it is no longer excessive viewing.”
Instead, Rayburn predicts that streaming will continue to test new models, such as plans to add an ad-supported plan to the platform.
He noted that the strong stock reaction is a result of Netflix getting all its revenue from streaming. This means that when a show does not give good results or the service sees a decline in subscriber growth, it is an immediate reaction.
At the end of the day, streaming analysts say that content spending will not decline, even with ongoing economic pressures, such as inflation and higher interest rates, and a potential recession on the horizon. Competition in the streaming area will continue to drive these companies to create and distribute more content.
“Where the dollar goes will be redistributed is the question,” Csathy said. “For Netflix, I think ‘less is more’ is a strategy that pays off for them.”
Disclosure: Comcast is the parent company of NBCUniversal and CNBC.