Ryan Haynes / Android Authority
Netflix surprised the world when it announced the first drop in subscriber numbers earlier this month. It's not a joke to drop 200,000 subscribers after a decade of growth. Poster Child streaming services have been in the business of content creation, acquisition and subscriber growth for years. However, even if you put aside the COVID-transmitted growth of membership and its subsequent slowdown, the decline in viewership has long been a thing of the past. Call it a subscription fatigue or flawed content strategy, Netflix's dip can be a warning story and learning lesson for virtually every streaming service. The reason is here.
Read more: If you want to stay on top of Netflix, you have to choose between quality and quantity
Lots of problems
At the time of release, Netflix reported more than 2,247 US TV shows and at least 3,846 movies. More content than anyone could reasonably see. And yet, finding content to enjoy is going to be a chore. That problem is exacerbated when you consider the countless additional streaming services. In fact, the problem is so bad that Doomsday Scrolling Netflix has become a legitimate meme. The popularity of our own streaming tips for what to watch on Netflix this week shows that users aren't able to discover what to watch on the platform.
Now, Netflix's blockbuster hits don't seem to have a fair share. Shows like House of Cards, Dark, Ozark, Stranger Things, and even Bridgarton have become part of the cultural zeitgeist. However, for each Stranger Things, the service commissioned and very quickly canceled ten twin-led shows. Derivative rather than blockbuster IP, the signal-to-noise ratio for the same content is much more slanted which has a lasting effect. It certainly doesn't help that Netflix tends to omit content before giving listeners time to nurture it. Hey Netflix, not every show can be squid games, or it can't be.
Shows like Squid Games and Stranger Things have become part of the cultural zeitgeist, but they are one-off in the midst of moderation.
The proliferation of mediocre content from Netflix's ‘good-enough' realizes a strategy that goes even further with the goal of delivering plenty of filler content. It's probably a remnant of the company's DVD-rental past, but becoming an Internet video library is no longer a meaningful strategy. Although syndicated content puts users on a platform, it takes meaningful core content to bring users into it. The battle for the ball of the eye means that the spotlight has returned to quality rather than quantity. As much time as users have, and the emergence of alternative services has finally given viewers multiple options such as Apple TV Plus and HBO Max.
Related: 18 Apple TV Plus shows you should watch first
Netflix is not unaware of the problem. In its most recent earnings call, the company said, “In terms of content, we're doubling the development of storytelling and creative excellence.” The company reiterated, “Our plan is to accelerate our viewing and revenue growth by improving all aspects of Netflix – in particular, the quality of our programming and recommendations, which our members value most.”
Netflix's instant gratification model has further broadened that issue of medium content. At first, Netflix practically created the idea of a dilemma. Why wait a week for an episode when you can watch the whole season at once? Of course, wrapping up a show on the first day and being able to chat about it with friends has a degree of instant gratification. However, if the bar is not high enough for the quality of the content, it runs the risk of shortening the shelf life of the product. There is an inherent risk of disconnection as there is nothing to hold users back and return to the service.
Instant gratification combined with mediocre content is the perfect recipe for losing Mindshare.
Meanwhile, both HBO Max and Apple TV have returned to the more traditional weekly cadence for episodic releases that keep subscribers engaged and back on the platform. It helps create expectations and keeps the audience engaged.
Interestingly, one service that seems to have struck a good balance between lots of content and relative quality is Xbox GamePass. In a conversation with my colleague Adam Burney, he proved that the monthly rotation and curated selection of games had led him to discover many hidden gems. There is still much to be found, but small curations mean that it is much easier to get to that content.
Also check out: Xbox GamePass: All You Need to Know
Apple TV seems to be following a similar model where shows are released at a slower pace and focus on quality rather than flooding the service with low-quality content. Although I wasn't a big fan of the limited library at launch, I personally found the catchy storyline in each show that stuck with me. Despite having only 120 shows and movies on the platform, the company seems to be paying dividends to Apple as it has already surpassed 40 million active subscribers.
Discovery is the key
Dhruv Bhutani / Android Authority
My concern with Netflix's strategy, however, extends beyond the quality of content. Specifically, it's about discovering that content. The streaming company's data-driven approach rarely scratches the surface of its own content library. As a fan of horror movies, I'm tired of being recommended the same range of popular movies as The Conjuring. I know Netflix has deep cuts like The Old Ways, but the award winning movie was not recommended to me despite my use of a lot of awesome content.
Our pick: The best movies in many genres on Netflix
Netflix's data-driven approach works well for surfacing popular content. However, it cannot measure the emotional side of the movie. Jenner tags may suggest that two horror movies are bound to come together, but there is more involved. Bringing suggestions based on popularly viewed content doesn't work well enough to keep the cinephiles stuck.
In contrast, despite being limited by nature and appeal, Mubi guarantees a thought-provoking cinematic experience. This is largely due to the curation of the people who go behind selecting each movie added to the platform.
While AI may not measure the emotional aspect of content recommendations, human curation and user-generated playlists can help solve it.
Spotify, Netflix of the music streaming world has faced similar problems, but it has been able to overcome it through user-led curation. Nowadays, my favorite way to listen to music is through user playlists that work much better to introduce me to new artists from Spotify's algorithms. Presumably, easy access to better quality content kept me stuck on the platform.
Related: Tips for making the most of your Spotify premium or free account
Combined with relatively limited high-quality content, it becomes even more important to have a strong recommendation system that prioritizes discovery over viewing the same content with slightly different twists. Customers need to feel the excitement and amazement as they tune in to the platform on the irresistible Deja Vu, which seems to be the cloud on Netflix's homepage.
Hadley Simmons / Android Authority
The content discovery problem is also a by-product of the user's limited interaction with the content. Of course, you can mark a movie with a thumbs up or down, but this is hardly enough to measure how much you like it. Another commonly used metric when viewing, but I often use movies in bite-sized packages.
Netflix is experimenting with double thumbs up to identify the content you really enjoy. However, a one to five scale or star-based rating may be a good way to gain more insight into the viewer's choices.
See more: The best TV show to watch on Netflix
Taking it one step further, the problem of customization extends across streaming platforms. There is no real alternative to filtering content on Netflix, Spotify and most other platforms. For example, I have no interest in listening to remixes of some of my favorite tracks, or I don't want to hear the contents of compilation albums that are often dropped from my listening list. Spotify gives no way out.
It is essential for streaming services to stop being ambitious salesmen of medium content and return to being librarians with thoughtful advice.
Extensive filtering or customization options go against the whole “keep it simple” instance of streaming services, but can be very well hidden in an advanced settings menu. The fact is that no matter how good AI may be in predicting user interest, it cannot take into account the preferences of millions of users. Even human curation can go this far. Giving users control would be a great way to stop being a passionate salesperson and instead return to being a librarian or curator.
If this all sounds obvious to you, maybe it is. Netflix and Spotify flew at a time when they had no competition. However, the entry of deep-pocket competitors with a legacy of core content creation is bound to keep a spanner on the rise, especially Netflix. In the case of Spotify, the service has to be repeatedly tried to be a profitable, curative and taste maker.
The real battle lies ahead where most streaming platforms will have to make strategic decisions focused on retaining users rather than quick solution strategies to gain subscriptions that may not last long. And while alternative streaming services like Apple TV may rely on the quality of the content at the moment, they too run the risk of heading into the same future of streaming fatigue if they don't act ahead of time.
Continue reading: What's new on Netflix this month?