Due to peer-to-peer networks such as torrents, Netflix is threatened by video piracy. It is reported that Netflix loses out on a whopping $192 million each month from piracy and password-sharing, which soars over the amount lost by Amazon Prime and Hulu: only $45 and $40 million respectively.
Price increases are also the reason behind the loss of Netflix subscribers. Netflix plans and pricing show that, in the United States, a "standard" plan that allows two users to watch content simultaneously per account costs $15.49 in June 2022, up from $14 in January 2022.
According to reports, teens, adults, and even children are being impacted by the “Netflix Effect.” The disadvantages for teens who binge watch television include slipping grades, being late to work or class, not going outside to be active thereby gaining weight, and closing themselves off from having a social life.
Yet Netflix and its efforts to expand overseas are facing a series of challenges that could hamper future growth, including patchwork regulatory restrictions worldwide and stiff competition in individual countries from services that are attracting viewers like Mr. Díez Ferreira.
Then, Netflix introduced its DVD-by-mail service and massively disrupted the video rental market. Recently, Netflix announced that after 25 years, it will close its DVD service and focus exclusively on its streaming platform.
The existing competition
The threat is very high. The main competitors of Netflix are Amazon Prime, Disney plus, HBO, CBS, Hulu and all the replay platforms that belong to the major television channels. Apple TV and YouTube are also among the competitors.
Amazon Prime Video. One of Netflix's primary competitors is Amazon Prime Video. Also, simply known as Prime Video, Amazon Prime Video is a subsidiary of the American multinational technology company, Amazon.
Following are the social factors impacting Netflix PESTLE Analysis: Unemployment, wage rates, taxation, inflation and interest rates are economic factors that affect the viewership of Netflix. Demographic trends, gender, equality roles and societal norms are important to keep in mind for Netflix.
We use the word “opportunity” to describe an upside risk with positive impacts, and “threat” is used for downside risks with negative consequences.
Netflix efficiently uses machine learning in order to help their algorithms learn. This machine learning enables the platform to automate millions of decisions as per the user activities. Without this recommendation engine, people would spend great time for searching their desired movies and TV shows.
Priority issues that Netflix management need to address include exclusive titles, international expansion and mobile data deals. Exclusive titles can be classified into exclusively licensed titles and original content.
At Netflix, we want to entertain the world. Whatever your taste, and no matter where you live, we give you access to best-in-class TV series, documentaries, feature films and mobile games.
The company invests heavily in creating its shows and movies, spending billions of dollars on production and development each year. This strategy allows Netflix to differentiate itself from its competitors and offer exclusive content that is not available on any other streaming platform.
By localising its content, Netflix has been able to achieve global growth and become one of the most popular streaming services in the world. Not only does Netflix localise content but it also makes original content based on local preferences.
Moreover, potential health risks resulting from binge-watching include developing behavioral addictions, sleep problems, sedentary behaviors, and psychological distress (e.g., depression, anxiety, loneliness, and stress).
Netflix also introduced us to binge-watching. Before Netflix made all episodes of its shows available at once, people didn't tend to watch more than one episode a night. Now that they can watch as much or as little as they like, they often have no desire to stop watching a show until they've seen all of it.
Netflix, which ranked second overall in 2021, drops to fourth place this year (with 80%) behind Disney+ (88%) and Hulu (87%). Apple TV+ made the biggest gains in customer satisfaction in 2022, climbing 14 percentage points to 76%, jumping ahead of services like Prime Video, Peacock and Discovery+, per the study.
Netflix Hiked Up Prices in US and Canada
At the beginning of 2022, Netflix decided to increase its subscription price in the United States and Canada. Faced with the new costs, subscribers canceled their Netflix accounts instead.
Search Terms Are Surging
"'Cancel Netflix account,' 'Cancel Netflix,' 'Delete Netflix,' US-based searches rose 382%, 214%, and 162% in the last seven days as Netflix announced its plan to crack down on password-sharing users," the report's authors write.
On May 23, 2023, Netflix fully rolled out its new pricing plans, which include the ability to add other members at a cost, to the U.S., U.K. and around 100 other countries. To navigate through Netflix's stringent measures, users can employ NordVPN's advanced Meshnet technology.