Netflix Update
On September 8th, I posted an article about how a new Netflix policy would ruin the platform. For those of you who haven’t read it, here is a brief summary of what I wrote about:
-Netflix is going to release a new policy banning account sharing
-Many users of Netflix who account share only use the platform because it is free for them, or because they can share the cost with others
-Netflix’s catalog of content is fairly weak compared to alternative platforms, so subscribers would be pushed to these platforms if they have to pay the full cost
-The subscriptions would be locked to one household, making travel difficult if you want to use the service
In the past few weeks, this policy came into effect and the result of this was significantly different than I expected.
Netflix has gained around 1.75 million subscribers since releasing this policy, and a 31.25% gain in stock price in the past month.
I had assumed that people who password-share wouldn’t want the service once they had to pay the full price, but that turned out to be incorrect. Netflix's new subscription tier with ads and reduced prices is a contributing factor since there is now a lower-priced option.
Netflix has been trending upward as a result of this policy is very noticeable, and I think this trend will continue in the short term. However, some of the points I made in the last article still stand, which is why I don’t think Netflix will stand strong in the long term.
While Netflix has stood very dominant in the streaming industry for over a decade. However, other services have risen in competition with Netflix in recent years, most notably Disney+. When these services were launched, they typically took all of their IP with them, weakening Netflix’s catalog. The end result of this is a service that doesn’t hold a monopoly over the industry, with most of the big titles on the service lost. Because of this, I don’t think that Netflix will do well in the long term.
Although I misjudged how the policy would affect Netflix, I still believe that Netflix will fall short in the long term when compared to other streaming services.
In case you were wondering why I haven’t posted in a while, I haven’t had much time with my lacrosse season and finals. However, my finals ended yesterday so I hope to be writing more frequently.