Editorial: Netflix is in Trouble…


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NetflixLoveNetflix has long had a dedicated fan base of loyal subscribers, but they have started to play with fire in an effort to remake themselves. Although it may be working for some, Netflix is facing real trouble that is just now beginning.

With this move Netflix has started to move away from just being a dumb pipe for content to a creator of some high end content. This so-called HBO model has brought subscribers of Netflix some high quality original shows, such as House of Cards and Orange Is the New Black, however, this move has also resulted in a smaller catalog of movies and TV shows.

The problem Netflix is having is one of perception as more and more subscribers are starting to feel that beyond the original content there is nothing worth paying for on Netflix. As with all things, Netflix can point to numbers all they want; however, if the perception is there is nothing good on Netflix that will become fact to subscribers.

So why is this getting Netflix in trouble?

Netflix counts on subscribers paying every month for Netflix. If you suddenly only want Netflix for House of Cards you could easily just pay for a month of Netflix to binge watch your show and cancel.

With the new $10 a month core Netflix plan, if you subscribe to just one month a year Netflix would lose $110 that they would have received if you subscribed all year. If just a fraction of Netflix subscribers started to only pay when their show comes out Netflix stands to lose millions of dollars.

Part of the problem is the way Netflix releases shows. Unlike other streaming services Netflix releases a whole season at one time allowing hard core fans to easily finish a show in a week or less, giving them about 23 days to watch other shows or movies before they cancel.

Will this move to high end HBO-style network pay off for Netflix? Will it push away too many subscribers who are looking for a large library of content? Can a smaller Netflix full of more high quality original content pay off? Or will the shrinking size of the Netflix library push subscribers over to other services?

Only time will tell, but from a sampling of our readers in addition to our Facebook and Twitter followers, there seems to be a growing number of Netflix subscribers questioning if they are getting their money’s worth with the new higher cost of Netflix. Even if just a fraction of the subscribers leave, it could turn into a real issue for a publicly traded company like Netflix as millions of dollars start leaving.

The question now is does Netflix realize what is happening among some of their most loyal subscribers? Can Netflix change the perception issue they are facing? Only time will tell…

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