Behind Netflix’s Stagnation Lie Opportunities for Other Innovating Platforms
It’s no secret that Netflix has fundamentally altered the landscape of TV and film over the last decade. The platform has around 150 million global subscribers, with a name so household it has become a commonly used verb – “Netflix and chill” – a la Google and Uber. Riding the wave of demand for on-demand content – streaming video consumption is up 72% year-over-year – Netflix isn’t going away any time soon.
And there’s no doubt that the company reached the size it is by setting itself apart from its competitors in innovative ways. Netflix has stayed true to its ad-free model, continuously invests in new, quality content, and boasts an impressive recommendation algorithm that keeps viewers around for longer. Yet this focus may have been its downfall, as it has recently become evident that the platform is scrambling for ways to increase the profit of its current business model without relying on ads.
This has meant that while focusing on content creation and working out how to reverse its negative cash flow ($3 billion in 2018), Netflix has missed opportunities to innovate and respond to the video consumption demands of today. Luckily, other platforms are emerging that cater to these needs.
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Netflix is lagging behind
Netflix has had some recent wins that have caught the attention of its viewers. In 2016, it introduced a feature that lets users see a mini trailer while they hover over the thumbnail of a film or series, and last year it released the Black Mirror episode Bandersnatch, which allowed viewers to dictate the trajectory of the storyline and “choose their own ending” to the show.
However, these new additions represent a small part of how much a company the size of Netflix should be innovating. While the platform has updated its algorithm and added a few features to make it more user-friendly, it has not made any big moves that respond to the demands that today’s users have around the way that they consume video.
Which platforms are plugging the gaps?
Today’s video streamers are a group of people with complex and evolving demands, and in order to succeed in keeping them engaged, streaming platforms need to innovate and surpass their expectations.
For example, in an age where millennials’ schedules are booked-up to the minute with work, hobbies, and social events, keeping track of what they’re watching on Netflix might be lower down on their list of priorities. That’s why Bestflix exists, to help viewers keep on top of their favorite shows and organize their Netflix time like they would their workflow, as well as allowing them to comment on and create memes and GIFs about different shows. Similarly taking the onus off the viewer, TV Time alerts users when new content is available so they don’t have to scroll through Netflix to find out what’s new or check when a new episode is released.
And building on this acknowledgment that – now more than ever – convenience and ease-of-use are king, Chill Remote turns your smartphone into a Netflix remote control.
Tapping into the demand for a more social experience around media consumption, Rave allows users to watch Netflix together, from anywhere in the world, while texting or voice chatting. While many people might blame technology for having created an individualistic approach towards video consumption, as most homes have more screens than people and virtually everything is available on-demand – Rave shows that it might just be technology that brings people back together.
Netflix should be embracing these platforms that expand on its offering in new and innovative ways, rather than focusing solely on streamlining their own product. After killing off its Public API in 2014, there are few options for apps that want to integrate fully with the platform.
What is the future of Video Streaming and Consumption?
With such a range of options for on-demand streaming services, it’s hard to know which platform has the secret to profitability. Amazon Prime Video falls back on the retail side of the company, Hulu depends on advertising, and while HBO adopts the same subscriber model as Netflix, it’s part of a larger media company with access to vastly more content. And with so many of these services embracing an ad-based model (just look at the success of Roku, Pluto TV and Xumo), it begs the question as to whether or not Netflix will be forced to follow suit.
However, if Netflix continues to reject an ad-based model, it will likely have to find another revenue stream. We could argue that this could come from monetizing its user data, a revenue-generating method used across big tech companies – much to many users’ concern. Netflix already mines its library of vast user data in order to fuel its algorithm, yet this seriously valuable bank of insights remains untapped by third-parties.
Another trend that many on-demand video services have not taken full advantage of is the move towards watching TV and film from smartphones – not least with the advent of foldable phones. Netflix has made moves towards embracing small-screen viewing by enabling faster menu scrolling on mobile devices, as well as changing the content encoding so that it is streamed more efficiently when internet might be spotty.
However, virtually none of the streaming services have recognized that many users also use their phones while watching video content, so when their phone is in use while streaming, it’s out of use for everything else. Audio streaming apps Spotify and Soundcloud allow their users to browse in and off-app while listening, could Video Streaming allow for non-viewing activity too? Adding features that allow viewers to use other phone functionalities while they watch could satisfy this demand.
The same goes for creating a more social experience around Video Streaming. Netflix and other on demand platforms’ minimalist approach towards video streaming (getting the videos to play as fast as possible, in the best quality, with the fewest interruptions) has proven effective until now, but the demand is arising for a richer experience. Socializing around media is the natural extension of what they have achieved so far, yet Netflix in particular remains out of step with industry norms by offering essentially no social options.
While Netflix subscribership seems to be only going up and up, along with the popularity of its original content, the platform needs to make some seriously business-savvy moves if it is to halt the cash-burning path it is seemingly hurtling down. By taking into account the demands seen across the board in the way today’s media-users interact with various platforms, Netflix and Video Streaming services can stop stagnating and start innovating.