The cracks are showing Netflix’s worldwide dominance.
According to research from Parrot Analytics, Netflix is still the king of streaming video, but audiences are gradually turning to new competitors, namely Disney + of The Walt Disney Company.
Netflix’s worldwide interest rate – a measure of the popularity of shows created by Parrot and a key measure of the number of new subscribers a streaming service is capable of attraction – fell below 50% for the first time in the second quarter of the year.
“The lack of new popular original programming and increased competition from other streamers will have a negative impact on growth and subscriber retention,” Parrot said.
Netflix relies on making as many different shows and movies as possible for as many audiences as possible, and the pandemic has upset that formula, forcing productions around the world to shut down.
The company will release its second-quarter financial results on Tuesday afternoon and has told investors not to expect too much. It sets a surprising low for the quarter as it told Wall Street it expected an additional one million new subscribers, a meager increase from its current total of 207 million customers. (It should be noted that lower expectations are easier to beat, and beating expectations by even a hair can boost a company’s stock.)
According to Parrot, Disney+ more than doubled its demand share in the second quarter from a year ago, and Amazon Prime Video, AppleTV+, and HBO Max are also growing.
Even as new entrants chipped away at Netflix’s longstanding grip, Reed Hastings, Netflix’s co-CEO, dismissed the competition as a spoof of the Netflix throne. In April, after Mr. Hastings was asked by investors why the company missed expectations of adding new customers in the first quarter, he said: “Of course we’re wondering, ‘Well, wait. a little, are we sure not. competition?'”
“We actually looked at all the data, looked at the different regions where new competitors were launched, not launched,” he continued. “And we can’t see any difference in our relative growth in those regions, which is what gives us confidence.”
“We’ve been competing with Amazon Prime for 13 years, with Hulu for 14 years,” he added. “It has also always been very competitive with linear television. So there is no real change that we can detect in the competitive environment. It has always been high and remains high. “
In other words: If Disney+ was hurting us, we didn’t see it.
Arguing that Netflix has been competing with regular TV and other streamers for so long ignores the fact that new competitors like Disney+ and AppleTV+ are much cheaper than Netflix (and rental TV). bag). And while those services make fewer originals than Netflix, they seem to be making more money.
During the second quarter, Disney+ received massive interest from “The Falcon and the Winter Soldier,” a series based on the Marvel Cinematic Universe that has completely dominated the box office in recent years. According to Parrot, “Loki,” another Marvel woman, also helped.
Amazon Prime Video grew during this period with the launch of “Invincible,” an animated superhero series for adults. And AppleTV+ attracted new customers with its original trilogy: “Mosquito Coast,” a TV series based on the 1981 novel; “For All Mankind,” a sci-fi series, and “Mythic Quest,” a comedy series that takes place in a game developer’s studio.
This month, Netflix said it plans to jump into the video game space. It hired a game executive, Mike Verdu, formerly of Electronic Arts and Facebook, to oversee the development of new games. It’s a move that’s significant for the company, not far from the TV and feature-length formula.