The businesses that reach into our homes, entertain us, and keep us company have been the only real winners of the current pandemic crisis, and Netflix is one of the leaders of that pack.
The streaming service reported a whopping 2.2 million new subscribers in the third quarter of 2020, just a little shy of their 2.5 million growth target but still a hearty gain that translated to $6.44 billion in revenue. It does represent a bit of a slowdown after an explosive second quarter (April – June, the months when it was really hitting home that yes, we’re all going to be stuck in our houses through the summer with no vacation plans or date nights), but the growth has still been strong.
A real worry, however, according to co-CEOs Reed Hastings and Ted Sarandos, has been running out of new content. Netflix production, along with all other major media producers, has been seriously impeded by the pandemic.
“Netflix was better positioned for this [than some competitors], but it can’t last forever,” Ross Benes, an analyst at who covers Netflix, told tech magazine The Verge. “If you’re going to have Hollywood shut down for nine months, at some point that’s going to catch up to you.”
Netflix has a massive library, but new content is what draws new customers, and their existing userbase has recently been vocally objecting to a large wave of recent cancellations in their original content. Shows like Glow and I Am Not Okay With This had loyal fanbases, but weren’t returning the required numbers of new subscribers to be justify continuing.
Production everywhere, not just for Netflix, has ground to a halt. It’s difficult and expensive to make TV and movies during a pandemic, and it will take time for that industry to rev up again once it’s able to. The next several quarters will likely see more cancellations as Netflix sheds anything it can’t guarantee a return on in favor of more seasons of proven material like The Crown, Stranger Things, and The Witcher. Quality over quantity will probably be the company’s policy for some time to come.
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