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Streaming service: Competition is causing problems for Netflix

Last update: 07/21/2021 10:23 AM

Netflix series like “Bridgerton” have also found many viewers in the spring. Nevertheless, it is becoming increasingly difficult for the world’s largest streaming provider to attract new subscribers.

Netflix again earned billions in the second quarter, although the big blockbusters did not materialize. Profit soared by almost 90 percent year-on-year to $1.4 billion. Revenues rose nearly 20 percent to $7.3 billion. This results in a return on sales of just under 20 percent. So far, the Group has only achieved a better result in the first quarter of this year.

The fact that investors on the stock market nevertheless reacted disappointed is due to the weaker-than-expected growth in subscriber numbers. In fact, Netflix was only able to add 1.5 million new users in the three months to the end of June, the fewer than ever before in a quarter. The forecast for the current quarter also caused disappointment: Netflix expects growth of 3.5 million new customers by the end of September, experts had expected 5.5 million. As a result, Netflix’s share price came under severe pressure in post-market trading on Wall Street.

17 billion for new films

With series such as “Bridgerton”, “The Queen’s Gambit” and “The Crown”, the group was able to attract numerous viewers to the screen in the spring. Some European productions were also great successes. The second season of the French crook series “Lupin” was accessed by 54 million user accounts in the first week alone. Netflix also landed a hit with the Spanish saga “Elite”.

But Netflix is no longer alone with attractive film offers. Rather, the streaming service is facing increasing competition, especially from the entertainment group Disney with its huge film archive. Apple and Amazon are also vying for the favor of the audience.

To boost business, the streaming giant plans to spend more than $17 billion on new offerings this year. These include new seasons of popular programs such as “The Witcher” and “You” or films such as “Red Notice” or “Don’t Look Up” starring Leonardo DiCaprio, Jennifer Lawrence, Cate Blanchett and Meryl Streep.

Playing on the Internet as a new source of revenue

In June, Netflix also opened an online shop for merchandise. The supply is still low, but in the future Netflix could open up a significant additional source of revenue through merchandising – following the example of the big competitor Disney. In addition, the company wants to offer video games via its servers in the future at no additional charge.

The trend to run games on the net and let users play via streaming over the Internet is gaining momentum, led by Microsoft, Google and Nvidia. Netflix CEO Hastings has been emphasizing for years that the group competes not only with other streaming providers, but also with social media, Youtube and several other forms of digital entertainment.

Arjun Sethi
Passionate guitarist, gamer and writer. Lives for the perfect review, and scrapes texts until they are razor-sharp.


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