If you thought Netflix was getting richer thanks to a pandemic, you’re wrong (Part 2)
Analysts at Needham said streaming companies like Netflix are expecting an increase in subscribers and revenue from non-US markets this year. However, regions such as Europe and Asia are among the worst affected by the pandemic.
This gave Netflix a “bifurcate”. In a short time, the delay of production made the amount of 18 billion USD invested in content become a dead capital flow, greatly affecting investor sentiment.
In the long run, the delay in producing new content may lead to a shortage of things to watch on this streaming platform.
Any solution for Netflix
Netflix subscriptions cost as much as $9-16 USD per month in the US. Therefore, according to analyst Martin, Netflix should consider adding options to watch ads with free or cheap users ($ 5-7). This strategy has just helped Netflix earn more revenue from advertising while increasing the company’s competitive advantage against emerging low-cost rivals such as Disney +, Apple + …
To avoid impacting the user experience, Netflix might consider inserting 6-8 minutes of advertising every hour for cheap or free accounts.
Analysts at Needham once predicted that Netflix would lose 4 million users by 2020 against the competition of more affordable emerging streaming services. Therefore, adding additional advertising business options will help the company reach low-income users.
According to Statista, by the end of 2019, Netflix had 61 million users in the US. This is equivalent to 75% of US households using this streaming service. In the context of the epidemic, the number of new subscribers may not increase. Therefore, finding ways to make money from existing customers is something Netflix should consider.
Besides, the disease is also a good opportunity that Netflix needs to seize. Stephan Paternot, co-founder and CEO of the online movie financial market Slated told the New York Times that this is an opportunity for Netflix to launch free real-life packages in many countries. It makes it possible for users to experience Netflix’s service while having plenty of season time.