Netflix, over the past few years, has seen tremendous growth in its subscriber numbers as more people have slowly but surely embraced the world of streaming content. A combination of factors, including people getting tired of being plastered with ads, as is common in traditional TV programming, as well as the COVID-19 pandemic, saw a significant rise of new users to the platform.
Domestically, data becoming more affordable, as well as Netflix carrying out campaigns such as offering a free mobile tier that has a limited number of shows and movies, has seen more Kenyans than ever join the platform. However, despite this growth, Netflix, for the first time ever, has admitted in a shareholder letter that additional competition from other streaming platforms has hampered its marginal growth.
Rather than directly acknowledging other movie and TV show streaming platforms, the company claims its competitors are more in the mould of TikTok and Sleep (yes, seriously).
“Sometimes employees at Netflix think, Oh my god, we’re competing with FX, HBO, or Amazon…but think about if you didn’t watch Netflix last night: What did you do? There’s such a broad range of things that you did to relax and unwind, hang out, and connect–and we compete with all of that… You get a show or a movie you’re really dying to watch, and you end up staying up late at night, so we actually compete with sleep,” explained Reed Hastings, Netflix CEO and co-founder.
The company has long held the position that there are more than enough people for each streaming platform to get a sustainable following without eating into each other’s profits. Further proving their point, they note that Netflix’s view time is less than 10% of US television screen time.
But the company, for the first time ever, acknowledging the rise of other streaming platforms as a reason for the slowed growth rate of their subscriber base is a signal that they are finally feeling the competitive edge of services like Disney+, HBO Max, Paramount+ and Peacock.
Now, the majority of these Netflix alternatives are not available in Kenya due to geo-blocking and licensing issues. However, we are still directly in the firing line as any change made by Netflix will likely be implemented globally. Just last week, the streaming company raised the price of its standard plan in the USA and Canada from $13.99 per month to $15.49. Depending on the reaction from subscribers, the rest of the world might be next.
Significantly, this price hike has seen Netflix take the crown from HBO Max as the most expensive mainstream streaming service. This will not earn them any favours from a person who is still undecided on which streaming platform to hop on.
Despite these new challenges, Netflix notes in its shareholder letter that 6 of the top 10 most searched shows globally were on Netflix in 2021. The biggest of them being Squid Game which took the world by storm towards the end of the year.
As a consumer, increased competition for Netflix can only be good news as, at the end of the day, people will flock to the platform that has good content which resonates with them. Netflix as well as other streaming platforms will ultimately be forced to create good TV shows and movies to win over subscribers.
