In 2022, streaming revolutionizer Netflix shocked the entire industry with the announcement of a staggering loss of subscribers.
According to The New York Times, it was the company’s first decline in almost a decade. Netflix attributed this loss of subscribers to increased competition with new streaming giants like Hulu and Disney+. But a multitude of other reasons such as password sharing, which approximately 100 million of their 231 million subscribers practiced, have also stunted its growth.
Now, two years since Netflix’s first epoch of slowing growth, the company has made a sharp reversal through efforts to appeal to current consumers. In an oversaturated market, Netflix has taken on new strategies from password-sharing crackdowns to new ad-based plans to increase its growth.
Starting in May 2023, Netflix began a crackdown on password sharing. Despite angering many users and prompting the #CancelNetflix movement on social media, Netflix persisted. During the crackdown, Netflix implemented a new ad-supported plan. This attracted many subscribers who preferred this cheaper alternative. By the end of the year, according to Business Insider, Netflix gained more than 30 million subscribers.
Additionally, Variety reported that Netflix made a $5 billion deal with World Wrestling Entertainment for exclusive streaming rights to “Raw,” which will join the platform in 2025. This is a scripted professional wrestling television program where the outcome of the match — winners and losers — are predetermined. “Raw” draws more than 1.7 million viewers per episode and is projected to grow Netflix’s advertising business through sponsorships on “Raw.”
By streaming “Raw,” Netflix has made the decision to pivot the variety in its selection by offering more non-scripted based content, including golf and tennis events. The streaming giant has started to compete with other streaming services, such as Amazon and Peacock, which both offer live sports programs. With this new source of sports entertainment, Netflix can now appeal to a new potential audience.
In April, Netflix welcomed a new film chief, Dan Lin, who will be in charge of producing Netflix’s content. According to The New York Times, Lin, the former head of production at Warner Bros., hopes to produce a more varied slate of movies that better appeal to subscribers. The shift provides hope for smaller and more “niche” productions — like mid-budget character movies and romantic comedies — that Netflix will give them the green light to stream their shows.
Within the company, Lin has swept Netflix’s film department through a series of changes, first laying off around 15 people in the creative film executive group, including one vice president and two directors. Lin has also reorganized the department by genre rather than budget, so as to streamline the greenlight process. Instead of focusing on big-budget productions, Netflix will now cover a wider range of genres.
With Netflix betting more on quality than quantity to grow, its stocks have begun to climb up again as investors gain more confidence in Netflix’s future. Still, competition is intense, and companies continue to raise their prices: Netflix recently raised its monthly premium plan from $20 to $23, and Amazon raised its ad-free plan to $12, up from $9.
Ultimately, consumers will have to juggle between opting out of rising subscription fees or having access to a curated selection of shows and movies. But for now, Netflix is getting back on solid footing.
