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Writer's pictureClaude Machiha

Why Netflix Has Lost Its Edge

Updated: Oct 23, 2022

The number one subscription streaming service with approximately 255 million subscribers worldwide, but not for long. The likes of Amazon Prime, Hulu, HBO max, and the kids' choice Disney+, are no longer far behind from the all time market leader of home entertainment.

"Ta-dum" isn't the common intro film track anymore on screens worldwide, nowadays it's more like "shwaaam" of Amazon Prime, and "dinum-num-dahm!" of Apple TV. Now the language of bubu is common to many of you folks who have children, but henceforth I'll only use the language of Economic Analysis I'm afraid.




Surprisingly, the decline in Netflix's user base has been something of a chronical death foretold, as indicated above. Long before any exogenous threat of a Pandemic, War by Invasion, or Monkey Pox scare, Netflix has been battling for market share, as the likes of HBO, Hulu, & the kids' choice Disney+, have been incrementally year on year, in strenuous contest against Netflix.


On average, a blockbuster film like Dwayne Johnson's "Red Notice", would cost in the ballpark of USD$250 million to purchase the rights of distributing, i.e. to have it on the Netflix list of films to watch. A low-budget, trial-like even (sometimes called a pilot season), series, may cost around USD$40,000 to USD$60,000. These series, with all due respect, involve the ones like the short 30 to 40 minute docuseries.


Amazon Prime, provides the steepest competition. They currently hold the second most number of viewers that any streaming service has, at a heavyweight 205 million subscribers worldwide. This is just 50 million behind the number one, Netflix. Amazon Prime has been focusing on building their subscription model up from application functionality and user friendliness, all the way to of late, the last 3 years or so, producing and filming their own Originals.


Netflix from the time of January 2007, when they announced their product launch to the USA and other major economies, was disruptively innovative. Disruptive innovation is how the likes of Facebook (Meta), the good old BBM, and Apple iPhones, took markets by storm. No one could beat them for the longest time. Disruptive innovation is a continual process however, so have any bit of slack, and your competitors will cash in their patiently held chits against you.



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