Netflix Is Shutting Down?
How the mighty do fall. Netflix has found itself in a situation so precarious that one misstep could have dire consequences.
This article is more than 2 years old
Netflix’s current predicament serves as a sobering reminder that even the mighty are not immune to exceedingly tumultuous times. Following an unprecedented loss of subscribers, Netflix is hemorrhaging money. The abrupt and seemingly unforeseen decline in the health of the business led to the commencement of a series of layoffs. Now, the company could be reaching a nexus that will either make or break them.
On Tuesday Netflix is scheduled to report its second-quarter earnings. The data that comes out of that report will provide insight into how bad of shape the streaming giant is or isn’t in. At present, Netflix’s Wall Street worth has slipped nearly 3/4 of what it was just last year. And as of now, market analysts are predicting that Netflix will reveal that it has lost an additional 2 million subscribers once its impending earnings report is released. That’s not good. However, if their subscriber losses are higher than what analysts have predicted, that will essentially cause Netflix’s already abysmal stock market performance to plummet even further, signaling even stormier seas ahead for the streaming pioneer.
There is a multitude of factors contributing to the situation that Netflix currently finds itself in. One of the most significant is that in the 25 years since the company’s inception streaming has become a fully fleshed-out industry. An industry where there are numerous competing options at price points far more attractive than what Netflix offers. One example is Apple TV+. Apple offers its platform to subscribers for just $4.99 per month and it is a platform that is full of premium and polished content all in 4K resolution. Conversely, Netflix starts at $9.99 per month sans 4K resolution. And its library, while full of many top-notch shows, is also flooded with sub-par options which could serve as a major turn-off for someone not wanted to sift through the junk to find something of substance to watch. Choosing the former is a no-brainer from that perspective. Needless to say, in a world where streaming has come to dominate how so many of us digest content, Netflix is straddling the line of irrelevancy.
Netflix is not going down without a fight, though. The company may have recognized its precarious position a bit late, however, it did recognize it. Currently, they are working with tech titan Microsoft so that they can offer a cheaper subscription option to customers subsidized by ad revenue. Additionally, even though Netflix has slid substantially from grace, they have not yet been formally dethroned. Globally, they are still the biggest streaming platform in the world and boast nearly 222 million subscribers. Still, the company has a lot of work to do if it wants to pull itself out of the figurative hole that it’s in. A good sign would be if it reports a subscriber loss of less than two million, however, that remains to be seen. But Andrew Hare, a senior vice president of research at Magid, did warn CNN Business of his belief that “Once Netflix becomes heavily undervalued by the market, all bets are off.”
