When the world was driven indoors, there arose a new demand for good entertainment at home. While the streaming industry has benefited from this across the board, Netflix has been by far the most successful.
The growth of Netflix
Out of all streaming platforms, Netflix has 208 million subscribers, much higher than the nearest competitor, Amazon Prime Video. In 2020 alone, Netflix gained 16 million new subscribers. This growth comes as a result of people being confined to their homes, turning to stream for entertainment. Netflix has capitalized on this surge of demand, growing on both their US as well as International market. They are valued at over $218 billion in 2021. Their shares have also skyrocketed, currently standing at $500 at the time of writing, after dropping to $290 due to the Covid-19 induced crash.
Why Netflix is surging
While the pandemic and the subsequent lockdown are attributed to their surging growth, they were ahead of the pack even before 2020. It has a vast catalogue, both original as well as popular content being platformed. From films and serialized shows to stand up comedy and documentaries, it has something for everyone.
But the pandemic has caused other disruptions in the entertainment industry that favours Netflix and its competitors. Here are some major plus points that allowed Netflix to outperform their competitors, specifically during the pandemic.
Shutdown of Theatres
The major reason for the surge in streaming and OTT platforms is the current lockdowns and restrictions on the operation of movie theatres. It is observed that Netflix and other similar platforms are taking their place, and are subsequently profiting from this. With such platforms getting more traction, this might continue even after Theatres get to open.
Slowdown in Production
Though this may seem counterintuitive, the slowdown in production has helped Netflix save more money and make more profit. With more and more people paying to sign up while less content is being made, profit is getting boosted beyond normal rates. Since they already have an impressive and quite popular catalogue, as well as a solid recommendation system, they can take more liberties with their production schedules.
Post-Pandemic Netflix: Where is it headed?
It has to be noted that the boost that Covid gave Netflix, as well as other companies, have slowed down. The subscription numbers for 2021 have been much less than expected so far, and only time will tell whether this keeps up or not.
There is also the race for content. Even though Netflix originals are popular, it is much less profitable and often risky to take up. It is much more profitable to allow outside content to be platformed on Netflix, but there is competition here as well.
While all this is true, the success of Netflix cannot be denied. With OTT releases and streaming becoming more popular, it might dig into larger shares of the audience that would otherwise approach traditional media like movie theatres. Covid-19 has helped Netflix gain momentum, and this is more than likely to continue.