Caitlin Bowen

Public Relations Specialist

Netflix’s Summer Offerings — United States

Strengths

  1. Brand Reputation
    • Netflix is the most popular streaming service with over 200 million subscribers in more than 190 countries.
      • Leading market share with a percentage of 21% (Susic 2023).
      • In 2019, a study conducted by Hawk Communications found that 43% of Gen Z “prefer Netflix over all other video channels and platforms for their video viewing” (Coya 2019). 
  2. Original, Award-Winning Shows
    • Variety of award-winning Netflix originals, TV shows, movies, and documentaries.
      • Tiger King, Stranger Things, Money Heist
    • Boasts interactive, choose-your-own-adventure content.
    • Personalized recommendations based on previous shows or movies watched.
  3. Affordable Pricing
    • Netflix offers flexible plans, ranging from $7 to $20.
    • Fits several different budgets.
  4. Global Presence
    • Subscribers can watch shows and original content from other countries, including South Korea, Spain, the United Kingdom, and more.
    • Appeals to a diverse subscriber base in the United States and abroad.

Weaknesses

  1. Limited Copyrights
    • Netflix does not own most of its content, apart from its original shows, movies, and series.
    • Content that expires ends up on other streaming services or platforms, taking its fans with it.
  2. Growing Operational Costs
    • From 2021 to 2022, Netflix’s operating expenses increased by a whopping 10.55%. From 2020 to 2021, the cost increased 15.15% (MacroTrends 2022).
      • Netflix’s growing operational costs mean that producing content is getting more and more expensive. However, thanks to its limited copyrights for existing content, the streaming service does not have much choice. It must continue to produce quality content that will keep its subscribers satisfied.
  3. Increasing Cost For Service
    • Netflix’s price continues to increase incrementally, leaving subscribers with a choice: continue paying for Netflix, or find a different, cheaper streaming service to patronize.
      • Netflix no longer has a free trial period for new users.
    • Another new ‘cost’ of Netflix is its password-sharing crackdown. In certain countries, Netflix no longer allows sharing account passwords outside the primary subscriber’s household. This has not resonated well with current subscribers, as it will incur an added monetary cost.

Opportunities

  1. Summer Vacation
    • Teenagers in high school and young adults in college have ample free time during their summer break or vacation, which is often filled with watching television and movies with friends, family, or by themselves.
    • On average, around 50% of Gen Z spend a “minimum of 2 hours per day streaming TV,” surpassing “the time they spend gaming, messaging or watching live TV per day” (Papas Wachter 2022). This does not account for summer breaks and vacations, when younger people have even more time to stream content.
    • According to a study by the Video Advertising Bureau, 87% of respondents said they planned to binge-watch three or more episodes in one sitting during the summer (Strong 2021).
  2. Longer Days, More Free Time
    • Summer brings more daylight hours, which means people — including working adults — have longer days. This allows for more free time after work to stream television, hang out with friends, or participate in other activities.
      • Longer days can also lead to more lulls throughout the day or night, leaving people searching for something to fill that time.
  3. Climate Change and COVID-19
    • Illnesses and global warming are encouraging more people to stay inside during the summer. With hotter days on the horizon, many people in warmer parts of the U.S. retreat inside to the air conditioning, making indoor activities more popular.
  4. Streaming Viewership During Summer
    • In July 2022, streaming accounted for 34.8 percent of audiences’ TV viewing (Axon 2022).
      • Streaming was up 22.6 percent compared to July 2021, with audiences streaming an average of 190.9 billion minutes per week. This is substantially more than 169.9 billion minutes in April 2020, one of the most locked-down months of the pandemic (Axon 2022).

Threats:

  1. Weakened Economy
    • The weakened economy, compounded with high rates of inflation, increased cost of living, and the potential for a recession in the United States, is leading to more scrutinized spending.
      • As of January 2023, over 15% of Americans say they do not use any TV subscription services to save money — up 2.8% from October 2022 (Fitzgerald 2023). 
      • Younger generations, who have more free time during the summer, are saving-savvy (Kealy-Roberts n.d.).
  2. Increased Competition
    • Customers have a wide variety of choices when it comes to streaming platforms, such as Hulu, Disney+, Peacock, HBO Max, Discovery+, Paramount+, Amazon Prime Video, Apple TV+, and AMC+.
      • Amazon Prime Video is catching up to Netflix’s market share, currently holding 19% (Susic 2023).
    • Different platforms appeal to different people in this population, as each one boasts its own original shows and content.
      • One study found that younger generations are starting to prefer Apple TV+ content over Netflix (Dimuro 2022).
  3. Piracy
    • Piracy poses a serious threat to Netflix’s growth. If people know how to watch their favorite shows or movies without paying a fee, there are few incentives to subscribe to a streaming service (Van der Sar 2022).
      • Increased costs of living may encourage piracy this summer, as more people have free time to watch shows, but may not want to spend money on a streaming service.

Citations

Axon, S. (2022, August 18). For the first time ever, more people watched streaming TV than cable. Ars Technica. https://arstechnica.com/gadgets/2022/08/for-the-first-time-ever-more-people-watched-streaming-tv-than-cable/.

Coya, D. (2019, May 7). Why Gen Z Turns to Netflix for Content. LinkedIn. https://www.linkedin.com/pulse/why-gen-z-turns-netflix-content-katelyn-woebse/.

Dimuro, C. (2022, January 18). Gen Z pays nearly $380 a month on Netflix, other subscription services: study. Penn Live. https://www.pennlive.com/life/2022/01/gen-z-pays-nearly-380-a-month-on-netflix-other-subscription-services-study.html.

Fitzgerald, T. (2023, January 27). Surprise: More And More People Are Cutting Their Streaming TV Services. Forbes. https://www.forbes.com/sites/tonifitzgerald/2023/01/27/surprise-more-and-more-people-are-cutting-their-streaming-tv-services/?sh=3a8061e7292d.

Kealy-Roberts, D. (n.d.). REVEALED: GEN Z IS THE MOST SAVING-SAVVY GENERATION. STARTUPS Magazine. https://startupsmagazine.co.uk/article-revealed-gen-z-most-saving-savvy-generation.

MacroTrends. (2022). Netflix Operating Expenses 2010-2022 | NFLX. https://www.macrotrends.net/stocks/charts/NFLX/netflix/operating-expenses#:~:text=Netflix%20operating%20expenses%20for%20the%20twelve%20months%20ending%20December%2031,a%2015.15%25%20increase%20from%202020.

Papas Wachter, K. (2022). What to Know About Gen Z Streaming Behaviors. AdvertisingWeek. https://advertisingweek.com/what-to-know-about-gen-z-streaming-behaviors/#_ftn1.

Strong, J.P. (2021, May 21). How Does Summer Affect Streaming Viewership? Strong Automotive Merchandising. https://www.strongautomotive.com/summer-affect-streaming-viewership/.

Susic, P. (2023, February 17). 30+ Video Streaming Services Market Share, Subscribers, Growth (Data 2023). Headphones Addict. https://headphonesaddict.com/video-streaming-statistics/.

Van der Sar, E. (2022, April 20). Piracy Poses Concern as Netflix Subscribers Drop for the First Time. Torrent Freak. https://torrentfreak.com/piracy-poses-concern-as-netflix-subscribers-drop-for-the-first-time-220420/.

*Note: I have no affiliation with Netflix. This content is for an academic project only.