People Are Cancelling Netflix Because The Movie Library Is Crap: "NETFLIX Buy Some Better Movies!"
5 days ago NEWS CONTRIBUTORS 0
People Aren’t Cancelling Netflix Because of Price Increases, They’re Cancelling Because the Library is Shrinking
It used to be impossible to choose something to watch on Netflix because there were so many great movies and TV shows. But now, it feels like it can be difficult to choose something because the selection feels more and more limited.
During their quarterly earnings call this week, Netflix commented that the missed target of subscriber growth was likely due to a small price increase a few months ago, where all subscriptions increased $1 per month. Jim Cramer on ‘Squawk on the Street’ commented that he was shocked that people would cancel over what seems like a relatively arbitrary amount.
But both Netflix and Cramer can’t see the forest through the trees on this earnings miss. This subscriber slowdown has very little to do with $1 more a month and far more to do with the Netflix library drastically decreasing.
We reported last month that the Netflix library has fallen 40% over the past four years, and this is clearly the reason people are starting to cancel their Netflix accounts. The one dollar price increase was merely a check-in for Netflix subscribers, many of whom are now realizing that their Netflix usage is declining, both as the Netflix library shrinks as well as other competitors cropping up. When presented with the alert that their Netflix subscription price was going to jump up ever so slightly, it was a reminder to check in on just how much utility the service was offering.
Netflix has made a big bet on original shows, and to some degree of success, these have been great. But could this big bet just not be delivering enough quantity to keep users happy? A lot of Netflix subscribers comment on the quality of the Netflix library, and the top 10% of the content is unarguably fantastic. But there is a lot of junk at the bottom with even more mediocrity in the middle.
We struggle to believe that spending $90 million on Will Smith movies is sustainable or the right strategy for the streaming service. Certainly, despite having total ownership over this content, that money could easily be spent elsewhere. As a benchmark, Hulu paid $180 million for the rights to stream ‘Seinfeld,’ likely one of the most expensive television shows, for five years. We’d much rather have half of the Seinfeld catalog than one movie when it comes to paying for a streaming subscription.
We can’t wait to see what else Netflix comes out with as they release more original titles. The recent ‘Stranger Things’ is pure magic, and who doesn’t want more ‘Making a Murderer?’ But at the end of the day, Netflix needs to balance out growing their own original library with maintaining a library of third party content.