Are the curtains closing for Netflix?
Given recent changes to Netflix’s platform, it’s no wonder that consumers are reconsidering their subscriptions. Warren Lindsell, director in research, insight and consulting at Savanta, questions whether Netflix has had its heyday or is able to bounce back.
While the entertainment industry showed signs of bouncing back to capacity following its decimation during the pandemic, recent news shows that the hike in the cost of living is taking its toll.
Savanta questions the longevity and strength of Netflix’s current proposition
Up to that point, one name stood out as synonymous with the changing media landscape, reflecting its position as the UK’s most loved media brand.
It came as no surprise to see perennial Oscar nominee Netflix taking the number one spot in Savanta’s Top 100 Most Loved Media Brands League Table. Further demonstrating the UK’s love for streaming services, we see YouTube, Amazon Prime Video, Disney+ and Sky TV also making it to the top 10.
Looking at data from Savanta’s BrandVue platform, we can see that, against the plethora of media brands consumers could mention, Netflix is second-most top of mind behind the BBC and is very much a household name. It’s second only to Sky TV for advertising awareness and takes the lead by a considerable margin when we look at positive buzz, demonstrating that consumers love what they hear about the brand – or, at least, they did.
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The recent announcement that Netflix shares fell by 35% demonstrates that, inevitably, squeezed consumers are now cutting back on paid-for streaming services to save money. But this problem won’t be unique to Netflix. It has such a commanding position in the market it’s likely to remain the market leader for the foreseeable future and, if people are going to ditch a subscription, Netflix won’t necessarily be the one they choose to drop first.
So, what is it about Netflix that we love so much?
When comparing Netflix to other media brands, consumers rank it the highest for being desirable, for being a brand for ‘people like me’ and for being exciting. More broadly, it is seen as being at the forefront of its sector. It also takes the lead for being attractively priced. While that may be contested following its price increase announcement, this boils down the value consumers place on the other things Netflix stands out for, or the ability of its competitors to encroach on those territories.
While this can be difficult to contextualize when comparing an entertainment provider against commoditized offerings – whereby product and service engagement is limited – it’s not to say these brands wouldn’t benefit from building a brand image similar to that of Netflix.
Netflix is a brand that has stuck by its principles. Despite a host of well-funded streaming providers nipping at its heels, the brand has resisted pressures to drive new revenue streams, be that advertising or premium-rated on-demand video. Netflix has, so far, continued to maintain its ad-free, one-payment subscription model – a huge bonus for customers, but a blow for advertisers who can’t take advantage of the Netflix viewing action.
However, despite boasting an ad-free service, Netflix isn’t completely brand-free. While there’s a certain mystery around whether paid-for product placement takes place, the likes of Coca-Cola, Subway and Diesel, to name a few, have been linked with Netflix original shows. Ben & Jerry’s even latched on to a phrase that has common parlance – ‘Netflix and chill’ – with a new ice-cream flavor named ‘Netflix & Chilll’d,’ suggesting there’s an opportunity for brands to hang on to the coat tails of the streaming giant’s success, if it can indeed maintain its competitive edge.
With Netflix now having entered the mobile gaming space, and all that entails with metaverse brand partnership possibilities, there seems to be a further opportunity to benefit from its position as the most-loved brand among consumers.
The challenge for Netflix is now to maintain its position as the number one streaming service. From Disney+ to Hulu, the brand is facing strong competition, and its recent announcement to increase prices reflects the challenges it faces as subscription rates flatten and the need to provide new and engaging content remains.
The jury is out on whether Netflix will eventually succumb to a tiered advertising subscription model for commercial survival, as a lot could still be achieved by others by following in the brand’s footsteps or being linked with it.
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