Netflix crisis: What it means for subscribers to lose a streaming device

Imagine that one year ago, when the broadcast revolution, sparked by a pandemic (when is a pandemic good for business? When your business depends on people staying at home), you felt the first impulse of being the new paradigm that ate the world. And pretend, in the spring of 2021, that you were asked to imagine how the title of the film industry might read from the future. You might have expected something like this: “For the first time, every Oscar nominee comes from a streaming service.” Or maybe this: “Movies: I’m still here but no longer driving the action.”

You probably wouldn’t come up with something like this: “Netflix Buys Alejandro G. Iñáritu’s” Bardo, “Plans Global Theatrical Release.”

But this is the headline that was shown on April 27 in diverse. Netflix has given iconic theatrical performances before – to “The Irishman,” “Roma,” and “The Power of the Dog.” But not with a major title six months before an international theatrical release is announced. Sorry, but this is not a Netflix brand.

This particular title wasn’t about the horrific depletion of Netflix’s subscriber base — the fact that the company lost 200,000 subscribers in the first quarter, and expects to lose another 2 million subscribers in the second quarter. However, these stats, reported the previous week, were, in fact, the deep background to the news about Netflix’s commitment to giving “Bardot” a large-scale theatrical release. Both titles were broadcasting different aspects of the same thing: that there were now powerful counterbalancing forces to the unfolding revolution.

Why did the loss of Netflix subscribers occur? A perfect storm of reasons, driven by the war in Ukraine (Netflix cut services in Russia), but also driven by the fundamental fact that Netflix now exists in the hyper-competitive world it has created — namely, the rise of streaming companies like Disney+, Apple TV+, and HBO Max. (There’s also the fact that passwords are shared, but that seems, in the scheme of things, like a somewhat hopeless justification.) The reasons are important, but the upshot is that as Netflix has been navigating what is arguably the worst crisis in 25-year history, and picture From Netflix as the unstoppable locomotive of the new age of the entertainment industry has received huge success. And if those titles delivered the words, last week CinemaCon, the motion picture theater industry’s annual gathering, added music, all coming together in one hit song like: “The cinemas are back, baby!”

Not that they are ever gone. But the fading of movie theaters — the decline of the theater experience and, yes, the potential death of movie theaters — has become, over the past two years, the most threatening specter to haunt the motion picture business since the advent of television in the early 1950s. In moments, he struck terror in the hearts of almost everyone who loved this industry. This is because it is all about the unknown.

But it also comes down to, of course, what everyone knows, at least in the reptilian brain of their liking, that people sitting at home watching a “first-time movie” on TV is, quite simply, a bad plan of action, since it’s a plan They are based on downgrading the basic charm of the product itself: making it less exciting, less important, and less legendary. For the movies, make no mistake, it’s all about the legends. (Just ask George Lucas, Frank Capra, or the creators of “Batman.”)

And so, as it happens, it is Netflix.

When it comes to the question of what exactly movies will look like (not just this year but five years from now, 10 years from now, 30 years from now), Netflix and the movie industry as we’ve known it have been embroiled in a war of legends. In the real world, movie theaters and streaming services can and will coexist. but how? This will ultimately be decided by the viewers. And the news, over the past two weeks, is that Netflix is ​​mortal — not a god, not an indomitable block, but a company like any other — that may end up having a powerful impact on viewers’ perceptions of the entertainment world they want to live in.

The most famous quote about filmmaking – William Goldman “Nobody knows a thing” – doesn’t mean everyone is stupid. This means, as Goldman notes, “No one in the entire field of motion pictures knows for sure what will work.” What people know is constantly changing; The way to achieve today’s success is not necessarily the way to achieve tomorrow’s success. This is the nature of work. And that kind of dynamic transformation is now taking place in the wrestling competition that is broadcast versus the play.

At CinemaCon, the film industry announced its strong commitment to providing theaters with a full slate of films (not just support pillars, but dramas for adult audiences), in doing so overturning existing conventional wisdom. But that was the right call. As the epidemic slowly but surely fades, there is strong evidence to support the idea that movie audiences want more than IP masterpieces. Just look at the dizzying success, exclusively in theaters, of such a movie as “Everything Everywhere at Once”. It may be true, at CinemaCon, that the death of the day and date were greatly exaggerated, but it is undeniable that the day and date have taken a heavy hit. A movie opens on the streaming service the same day it opens in the theater – isn’t that obvious? – way to devalue this movie. And if this is true, everyone loses.

But what Netflix sells for, and so legendary, is that a movie watched at home is just as valuable as a movie watched in a theater. It’s just a different value, one we all have to get used to. Netflix has successfully defined the streaming revolution by its measure of superiority. The pandemic has allowed us to give this model the ultimate test of the new normal. “Netflix and chill” turned into “Stay home… and why leave? Never?” Many bought this fantasy of what life would be like now.

It was a way of thinking encouraged by Netflix, which took a very real tech innovation, one that’s not going well, and amplified it into a kind of fairytale. Anime legends begin with the fact that they Larger From you. You are literally looking to see them; You sit in the middle of a crowd to test them; At their greatest, movies are dancing in your head to the point of rewiring your brain. (That’s what great art does.) But what Netflix has done, by deftly marketing itself as the only streaming service you’ll ever need, is replace the sheer amount of movies with the sheer massiveness of Netflix.

Legends Said: Here, in your house, is the only huge you’ll ever need – a Netflix smorgasbord. And since Netflix’s vaunted business model aimed literally at reconnecting the entire world, enrolling every consumer on Earth as a subscriber, once you’re part of the Netflix family of couch entertainment, you’ll now see what others have been seeing, part of the dream of what movies are. Streaming will replace the play because Netflix will replace the movies. And even with the entry of Netflix’s competitors (Disney+, Hulu and Apple+), this hasn’t changed the paradigm of the way we’ve been thinking about streaming, an older model that has been transplanted onto the map and owned by Netflix.

But when Netflix did poorly in the first quarter of the year, losing subscribers and also, for the first time, dropping below 50 percent of the market share of the streaming world, the enormity of their legends was revealed as a kind of man-behind-the-curtain fantasy. No, it turns out that their famous selection of options, dominated by a high percentage of mediocre products, will not take over the world. Netflix wasn’t going to replace movies. There were, of course, other services and other options. But more than that, choosing to stay home to watch a movie wouldn’t be so damned dictate. As noted by Pivotal Research Group analyst Jeff Ludarczak, “Broadcasting appears to have been almost completely hacked globally in the post-COVID era.” This sounds like a statement of success, but in fact it is a profound undermining of the Netflix myth. Fully hacked! No room for growth.

In other words, live streaming is here to stay, but it doesn’t have to keep getting bigger and bigger and bigger. It has changed the world of entertainment, and will continue to do so, but this world is subject to other dynamics, including the re-embracing of cinemas, which is driven by something as primal and eternal as our desire to watch movies in the comfort of our home. is called: We want to get out of the house. Netflix’s poor Q1 did more than just lower its stock price. It created a hole in the company’s myths. And that’s fine for cinemas, which are the rightful home of what we call movies, and which require their own legends to survive.

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