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The Downfall of Netflix




The Internet is a tool that is used for various things today. From work to entertainment we do everything on the web. Especially on the entertainment front, we have seen a massive number of changes in the past decade. These changes have been so big that they have completely changed our perspective on how we view the entertainment industry as a whole, so much so, that cable TV which was once considered the crown jewel of the entertainment industry is now on the verge of being completely replaced by over the internet mediums of entertainment, mainly streaming apps. The content on these apps provides a sense of convenience and they can be enjoyed anywhere at any time on any smart device as long as users are connected to the internet. Plus another advantage is that these apps are quite cost-effective as compared to traditional means of entertainment like a cable connection.

Since the internet has become so cheap, as evident by the pricing of major internet service providers in the country, for example, in the case of Cox internet prices, one can clearly observe how cost-effective they are even for high-speed packages. Since the internet became so cheap and the entertainment options became so viable people thought to switch over to these mediums, and it all started with Netflix back in 2011. The king of video streaming platforms which is the oldest as well out of all its competitors has ruled this industry ever since its inception with almost 214 million active subscribers to this date. But with every other technology going obsolete or being taken over by something new, the same is the case with Netflix which has started losing subscribers for the first time in its running history. Here we will try to identify why Netflix is tumbling down and whether the end of Netflix is finally near.

A Timeline of Netflix’s Downfall

If we take a closer look it will become evident that Netflix is not doing well since last year because Netflix last year’s market cap was at 261 billion dollars and the current standings are at 154 billion. This shows a steep decline of 41%, which has resulted in an estimated loss of about 100 billion dollars. There was a time when Netflix stood tool in the ranks of big companies like Apple, Amazon, Google, and Facebook, and the collective term was known as FAANG, but now Netflix is out of this league. The major reason for this ouster is because of the continuous decline in revenue and subscribers happening over the last year. 

This is the first instance that Netflix has lost subscribers and in a desperate attempt, the company is looking at options for cheaper packages integrated with ads, a move that has received severe backlash from fans and something which can further bring down the company’s reputation. So a move they were considering to revive the subscribers can result in more damage. This might come as a surprise because two years ago, the year 2020 was considered the best year for Netflix when it recorded a jump of almost 40 million subscribers from 167 million in 2019 to 203 million in 2020. But this boost was a temporary one, which was mainly pushed due to the COVID pandemic in which users were moving towards internet-based mediums, and cord-cutting was at its peak. 

The Cause behind this Downfall 

This downfall is due to many strategic incompetencies on Netflix’s part, including foolish business decisions and deteriorating quality of content library were some of the main factors which we will discuss below. 

Tough Competition

Competition is something that can turn any business to dust if you are not evolving and improving with time. In the case of Netflix, it had seen an undisputed reign in the streaming territory for quite some time. But seeing its success many entertainment giants followed suit. Now HBO, Disney, and Amazon all have their streaming platforms that are giving tough competition to Netflix. Especially Disney with its Disney+ platform has racked in 130 million subscribers, a number which is increasing with every passing day, as it is riding on the Marvel Studios hype where all the original Marvel character shows like Loki and Wandavision are premiering on the platform. Apart from that, Disney+ also has the Starwars franchise and shows like the Mandolorain which have a massive fanbase. 

On the other hand, HBO Max has DC’s rooster and they have recently flipped the game by releasing Justice League Snyder’s Cut. Because comic books movies and TV shows are in trend today, these companies exactly know that and they are cashing this hype in the right way taking loyal subscribers out of Netflix’s nest. Plus Disney and WB are giants that make a lot more money through other ventures like theme parks, movie productions, and merchandise selling.

Degradation of Original Content 

In the media industry, there is one and only golden rule that content is the king. And Netflix has always reigned on top because of its diverse content library consisting of gems from around the world. But recently this originality and exclusiveness have dropped, although there were some amazing shows like Squid Games in the past year, these examples are few and far in between. But in comparison, its competitors like Disney+ are churning out hits like Loki and Mandalorian. On the other hand, Netflix has now been majorly dependent on licensed content. A testament to that is seen in the form of Friends and The Office reruns on Netflix, which were the most-watched shows in 2019, and they made up 18 percent of all streaming total.

This business model is quite dangerous and volatile as licensed content is not there permanently and as of now both these shows have been pulled from the lineup. Friends was a show that premiered more than 15 years ago but still musters up more viewership as compared to all Netflix originals combined, this says a lot about the quality of content that is coming out of the platform today. The situation is getting so bad that even beloved shows like Strangers Things are becoming harder to market with each passing day, while productions are being severely affected due to the pandemic.     

Not Investing in Tech

Another field in which Netflix lacked was the latest technology. That’s because Netflix was never a tech company but if you look at its respective competitors like Disney and Warner Bros owning Disney+ and HBO Max respectively. These are big studios and have been in the movie business for quite some time. That is why they are equipped with the latest technologies because that’s the need of the hour to make a film today. In the case of Disney, it has significantly invested in CGI and modern animation styles in collaboration with Pixar. Now Disney as a studio has such polished CGI and graphics teams that can pull off almost anything out of a green screen without even a tad bit of discrepancy.

On the other hand, Netflix never had this capability because Netflix was never a tech company, rather it was always a media distribution company. And why Netflix can’t produce a film like Avengers Endgame? The simple answer is that they don’t have the technical capabilities to pull off something like that, and if they would have outsourced the VFX department it would have been so much expensive that even the cost of the production wouldn’t be recovered. While Disney has achieved this so easily, and at a much lower cost because they have hand’s on expertise and studios to do so. So not focusing on technology and the latest trends have also served as a major blow to the overall quality of Netflix’s production and in turn, revenue. 


There is no doubt that  Netflix has enjoyed a huge fan following for quite a while. It has been the biggest streaming platform for more than a decade, but this is also true that every king’s reign has to end, and for Netflix, these above-mentioned issues are clearly indicating towards that end.


Editor-in-Chief at DroidJournal. A tech-enthusiast, guitarist, and an anime fanboy!

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