Does Netflix Overnight $54.3 Billion Loss Pose a Ripple Effect Threat on Other Streamers Like Amazon, HBO Max, Hulu, Disney+?

Published 04/21/2022, 7:00 PM EDT

via Imago

Netflix’s stocks nosedived 35% on Wednesday after it just recently reported a loss of 200,000 subscribers. But it wasn’t just Netflix that was affected, Disney, Warner Bros, Paramount, and  Discovery’s stock value plummeted as well.

The company has blamed its loss of $54.3 billion on increased competition and its suspension of services in Russia. Although this may be the opportunity for the other streaming platforms to finally gain ground against the streaming giant, some analysts hold a different option.

What does this indicate for rivals of Netflix?

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The traditional media enterprises jumped to streaming when they realized the potential of the market. Moreover, the decreased TV ratings and declining sales of movie tickets propelled them to follow in Netflix’s footsteps. This led to an increasing number of streaming services. LightShed Partners analyst, Rich Greenfield thinks that the future of streaming market is unstable and “less profitable.

With fewer subscribers and increased prices, the streamers would be competing to produce original content, which would lead to more production costs. Kevin Westcott, Deloitte’s vice-chairman revealed that 25% of US subscribers canceled their subscription after their favorite shows ended. Customers don’t keep a subscription service for an entire year, instead, choose to jump from platform to platform. 

“They’re frustrated that they have to have so many subscriptions to get all the content they want,” Kevin said.

ALSO  READ: Elon Musk Slaps a “Virus” With an 8-Word Tweet for Netflix Subscribers Loss

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How does this affect the producers and the talent agents? 

With such heavy losses, Netflix might cut down on its $17 billion programming dollar budget. This could also mean that the company may take fewer risks with original content. The streamer may also withdraw from talent deals. 

Furthermore, interest in Netflix’s catalog is waning. On the other hand, HBO Max and Disney are growing by double-digits. Apple+ just received praise for its show Severence (not to mention their recent Oscar win) and HBO Max churned out Peacemaker. Thus, Netflix has to now produce content that subscribers want to pay for. Its popular titles have already ended like Money Heist or are soon ending like Ozark. To cut down the losses, co-chief, Reed Hastings has already announced their plan to introduce ad-supported cheaper plans. They are also planning to monetize households.

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The future of the streaming world is truly hanging in balance. Do you think others will follow Netflix‘s footsteps and loose subscribers?

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Srabani Biswas

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Srabani Biswas is a writer at Netflix Junkie. She is a sociology graduate from Lady Brabourne College. Previously, she has contributed to Sports India Show and The Sports Room as a sports writer, and interned at Ripples Learning.

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