As Netflix’s streaming competitors, such as Prime Video and HBO Max’s WarnerMedia, focus on consolidation and studio acquisitions, Netflix will prioritize its own service and investment in games click the available studio IP. It’s a refreshing transition away buy anxious movie studios or long-forgotten lists. But does it work?
Netflix clarified its streaming strategy second quarter letter to its shareholders. Referring to recent mergers WarnerMedia and Discovery and acquisitions and mergers between major media capabilities in recent decades – e.g. Disney and Fox or Viacom and CBS – The company said it “does not believe that this merger has affected growth much, if at all”. (If I’m streaming right now, you definitely need to inject.)
In addition, Netflix is not shopping for studios in the same way as its competitors have been. Netflix’s strategy, on the other hand, is simply improving itself. In other words, Netflix wants to be more like social apps than other streaming services. Its main competitor in space, according to Netflix, is itself.
“While we are constantly evaluating opportunities, we don’t see any assets as‘ mandatory ’, and we haven’t yet found any large-scale assets that would be compelling enough to operate,” the company wrote in a letter to shareholders. “In a competition to entertain consumers around the world, we continue to compete for screen time with several companies, including YouTube, Epic Games and TikTok (just to name a few). But we are mainly competing with ourselves to improve our service as quickly as we can.”
For a company that seems interested in buying movie studios, Netflix executives touched on the acquisition and merger competition several times during Tuesday’s earnings call. While Netflix is open to the right opportunities, the company’s top fans said Netflix is “picky” in terms of assets and IP.
For the sake of clarity, Netflix continues to lead the ongoing battle for our eyeballs (and our money). Netflix, with about 209 million paid subscriptions, is primarily Disney Plus, which accounts for about half of that paid membership. Netflix has a decade-plus position in other streaming services, and has more runway to try out its product and take risks that smaller services simply can’t.
It brings us to the games. While Netflix has not given us a precise timetable for game releases, in addition to making the initiative a multi-year venture, the company said it believes it is “the right time” to explore the expansion. Netflix has repeatedly said it believes its primary competitors are highly committed places like TikTok and Fortnite. But Netflix dives into gaming seriously – rather than individual trials like a Stranger Things game or even Bandersnatch – the streaming giant will enter a period of transition as the world begins to reopen and streaming faces new barriers to attracting and retaining subscribers.
The company announced that it added 1.5 million paid members in the second quarter of 2021 to more than a million indicative forecasts, even though it lost about 400,000 paid net additions. But while the company said its business is healthy and its turnover rate – the number of members leaving the service – has declined compared to the “more comparable” quarter of 2019, CFO Spencer Neumann said in a company earnings interview that Netflix still feels “A little bit of that we hope to be through – and we can’t be sure – but we hope for the end of this covid chopiness. ”
When looking at the company’s future challenges in this way, Netflix’s big bet on the gameplay. It creates new ways to extend viewers ’already resonant content and characters. But what would Netflix games even look like?
Speaking about the company’s gaming strategy going forward, Netflix CEO and Product Manager Greg Peters reiterated during the call that the company saw gaming as “a continuation of the core entertainment offering we have been focusing on for the past 20 years”. It plans to develop games for mobile devices first, although other formats can be kept in line. And while Netflix plans to try its approach to gaming, Peters said it includes licensing options, existing IP-based games and stand-alone games. According to Peters, it may even include a game that produces enough hype for a spinning movie or series.
“Just as we are constantly expanding our offering by adding new genres, scripts, movies, local language programs, animations, we think we have the opportunity to add games to this offering and provide more entertainment value to our members,” Peters said. “and that Netflix’s attack on the game mode would be a” multi-year effort. ”
Whether playing Netflix content can help expand it in a meaningful way is impossible to say right now. But Netflix’s focus on content and products over IP acquisitions and mergers – a game favored by most of its streaming peers at the moment – shows that Netflix is still largely operating in its own league.