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What Does The Future Hold for Netflix? (Updated)

Netflix is still the largest streaming service, but will recent troubles force them into adding commercials?

Netflix Office LA

Since our previous report on the big Netflix subscriber loss in April and July (2022) things haven’t gotten much better for the streaming giant. 

Although Netflix is still the largest streaming service in the world, subscribers have been leaving (or not signing up), and the stock market hasn’t been kind as its stock price is on a downturn. Since the initial 200,000 subscriber loss, Netflix has lost 70% of its value. 

Tip: Netflix admitted to a 1.3 million subscriber loss for Q2 2022 in a report released on July 19, 2022.

Netflix is still considering a massive investment in a new studio on the Jersey Shore on the grounds of the former Fort Monmouth; EIC Ian White lives less than 2 miles from the proposed site and is still not convinced that the acquisition will happen with other groups now bidding on the property which is less than 60 miles south of NYC.

The plan to acquire 289 acres and create one of the largest television and film studios in the United States would require Netflix to invest $200 to $300 million in the property; New Jersey has offered the media company significant tax breaks if the project proceeds.

How Netflix Is Trying To Get Back On Track

Netflix Homescreen Featuring Money Heist TV Series

As a result, of its downturn, Netflix has done, or is in the process of doing the following, none of which are good PR moves:

Layoffs: Netflix started by laying off 150 employees, and the latest round totals 300. From the workers’ standpoint, layoffs are never a good thing, and once again don’t make for great PR, but decreasing subscriber revenue and the high cost of content production make for difficult decisions. 

Accelerated Content Cancellations: Netflix is expected to cut its $18 billion dollar content product budget significantly. In order to meet the amount of reduction needed, more currently running shows will be canceled early and production of new content will be scaled back.

One of the frustrations for many Netflix subscribers is that while it debuts a lot of great content, many quality shows are canceled after only one-or-two seasons. 

Obviously, not all shows deserve to be renewed, but it appears that Netflix follows a trend of spending big money on a lot of promising content, but then canceling shows just as viewers have become invested in it. This is a sign that Netflix is stretching itself too thin.

Netflix Logo

One of the problems with streaming is that while it has given us access to a lot of content, there just isn’t time to watch it. This also means, as we have reported previously, the growing number of streaming services might be chasing after too few viewers with not enough dollars to spend. It didn’t help matters when Netflix increased its monthly subscription fees earlier this year

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Password Sharing Crackdown: The idea is to charge users that share their passwords with friends or family that live outside the home. However, the logistics of clamping down on this practice is not easy. Some observers already think it’s a mess

Ads: After several months of speculation, Netflix has decided to surrender to the idea of including Ads in their service

However, before everyone panics, Netflix is not planning to discontinue its current Ad-Free tiers, but just as other services, including Peacock, Paramount Plus, Hulu, and Disney+ have implemented ads or planning to, Netflix will be adding a lower-priced Ad Tier in hopes of luring new subscribers and bringing back old ones who have left. 

Update (July 14, 2022): Indications are that Netflix will debut its Ad-supported Tier plan sometime before the end of 2022 and is partnering with Microsoft for ad sales.

In the chart below are the current “Ad-Free” tier prices and features. What the pricing and features of an Ad-Supported tier might be have not been revealed. 

Netflix Monthly Plans June 2022

Update (October 14, 2022): Netflix Details “Basic With Ads” Tier

Netflix and Roku 

The crazy thing (or maybe not so crazy thing) is that Netflix is rumored to be considering buying Roku. However, not everyone is on board with the idea, so financing might be a tough go if this is even a serious option. 

For reference, Roku dominates the video streaming device market, ahead of Fire TV, Apple TV, and Android TV. What is interesting is that Roku has started providing content in addition to their devices.  

This is a continuing story, watch for additions to this article or new articles as things develop.

UPDATE (12/1/2022): Interview with Netflix CEO Reed Hastings. Interesting discussion on the streaming wars, the current state of Netflix, and its future.

Related reading:

4 Comments

4 Comments

  1. Richard Lock

    June 26, 2022 at 6:05 pm

    Get rid of Barry and Michael!

  2. J in B

    June 26, 2022 at 9:55 pm

    no mention of the red envelope side of the business. I canceled my streaming but stuck with my disc plan because the number of films available remains awe inspiring. Blu-Ray continues to be the preferred format for unmatched picture and audio reproduction.

  3. ORT

    June 28, 2022 at 2:48 pm

    I tried Netflix a few years ago. I think I had it a maybe three months and then cancelled. My reason was like me: Simple.

    I did not watch a lot of it and what I did watch was just too weird, although I did finally make it through the series called “Penny Dreadful” and almost one episode of
    “Stranger Things”.

    The former because I very much enjoy the acting of Eva Green and Timothy Dalton and the latter because of (HUBBAH! HUBBAH!) Winona Ryder. Watching some of the weirdness of “Penny Dreadful” proved to be a “soul-sucking schwarzes loch” and “Stranger Things” was weirding me out with just the first episode and that in spite of Miss Ryder.

    So. Perhaps I too should look at the rental of DVDs/BluRays and mayhaps they will also do 4K pressings
    of films.

    ORT

  4. Anam

    July 7, 2022 at 9:01 am

    I tried Netflix a few years ago. I think I had it a maybe three months and then cancelled. My reason was like me: Simple.

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