
Hey there! So good to have you back again! Wondering why the Netflix model will take more than just a quick fix? Well, then this blog is a must-read for you. Will Netflix soon be out of business? Let us quickly find out.
Currently, Netflix’s survival requires the platform to shift from a gateway to a destination. The faster this is done, the better will be for Netflix and the customers who are engrossed in the Netflix world. The decline in subscriber numbers is just a few of the challenges that Netflix has been facing in recent times. Netflix’s share price also fell by over $122 on 20th April, a decrease of over 35% in one day. Along with this, a fall of $35 billion in market capitalization was also seen.
So, does this mean that Netflix will soon be out of business? The current business model of Netflix still provides tremendous scope for development provided they are ready to face realities related to pricing, subscription, passwords, advertisement, and content.

Let us now deep dive and understand the psychology of subscription?
Netflix is popularly known as the content aggregation platform. From a customer’s perspective, it is a platform that provides a wide range of movies, TV shows, and other content which customers can choose from and watch as per their suitability. This simply means, that Netflix collects content from different publishers and then distributes it to customers. This is exactly where the gap is and where the business model stops, which makes Netflix nothing more than a television channel. It is just a getaway to content where the subscribers pay to keep the gateway open. Does this also remind you about the cable TV subscriptions and channel zapping? The OTT subscription model is no different.
Netflix on the other hand seems to have given its subscribers reasons to leave, part of the reason being content itself. Another reason which has led to a decline in subscriber count is pricing. Keeping content issues aside, the loss of subscribers is also because of the pricing model. Raising prices is a weak strategy adopted by Netflix which led to negative customer opinions. Generally, when prices are raised, customer’s attitude tends to fall and so does customer engagement. This led to the drastic fall leaving space for competitors, especially those who are no longer differentiated. Increased subscription costs without increasing benefits are one of the least clever strategies, especially in a highly competitive, undifferentiated market.
It has also been reported that Netflix is planning to bring commercials on the platform from early 2023. But the whole idea of paying for a subscription and choosing OTT platforms was to get rid of advertisements. Here in the case of Netflix, bringing in advertising is likely to cause a major backlash and further may lead to a loss of subscribers. The question here is not whether advertising will be tolerated but what if a new company comes up with an advertising-free model?
Password sharing piracy is another major challenge that indicates how business logic attempts to undermine consumer psychology. Sharing relatable content will always be a consumer instinct. In a similar context, Netflix’s 222 million subscribers may be sharing their passwords with an additional 100 million consumers. Instead of preventing customers from sharing their unique passwords, Netflix should instead adapt to what customers love to do the most which watching content and discussing it. Netflix can then find creative ways to monetize this idea.
Another reason for the downfall could also be because of the wide content collection. The content is no longer the magic that it was a decade or two ago. It is believed that the wider the content collection, the more difficult it gets for customers to decide what exactly they want to watch. On the other hand, the wider the content collection only fewer consumers will be satisfied because there always will be some other platform providing something else to keep their customers more engaged.
The solution here would be to add the following:
- Better curation of content.
- Using different filters for consumers to select from options provided, and
- Providing better suggestions for content.
Thus, Netflix needs to understand today’s content consumption ecosystem. It is seen that consumers do not consume content as it is served but instead, consumers seek more information on the content that they intend to consume. Secondly, they also desire to talk about the content they love/hate. Currently, the business model of Netflix just contains two blocks that include the content publisher and the other content aggregator. It is time for it to look beyond its current forte. Netflix should come up with something that YouTube has been doing for a while now which is providing movie reviews, content comparisons, ratings, and so on for better engagement. Netflix can also co-create an interaction space wherein the consumers can openly express their views on content consumed and about content pieces they care about, something which Instagram, Pinterest, and LinkedIn figured out a few years ago.

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