They need to grow their subscriber base continually - or be bought out -- or find a way to leverage what they have to generate a new revenue stream.
They could surprise people who are looking at the old paradigms and come up with an ad-supported version of mobile delivery.
TechCrunch (More at the source)
Yes, all of us are Netflix users – and that “us” is increasingly global. We all happily shell out our low monthly fee without even thinking about it. Netflix is killing it, right?
But, that strength of reach and easy subscriptions is also its fundamental Achilles heel. Those subscriptions – that content — alone drive its business model. That’s it. No diversification.
So, in order to be long-term profitable and survive, Netflix must continue to acquire massive numbers of new customers, retain those that it has, and do it in a way that keeps its subscriptions at a low price we are conditioned to pay. Amidst the endless array of competing SVOD services worldwide, however, that will be harder and harder to do. Its growth both in the U.S. and overseas has already raised red flags.
That means continuously “feeding the beast” — our voracious demand and expectation for new compelling premium A-list-driven content. That’s why Netflix’s Chief Content Officer Ted Sarandos just recently announced that its goal is for 50% of its content to be originals in the next couple years. Netflix has no choice.
But, that beast is increasingly expensive to feed (especially at that scale). Those costs will only skyrocket moving forward, as the expanded playing field of SVOD competitors fight for access to a limited supply of A-list marquee talent they too hope will attract new customers (and keep them there). Netflix’s Originals-only formula — that singular model — is not sustainable long-term for a company of Netflix’s size.
No comments:
Post a Comment