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Netflix Invites More Subscribers to Join its Preview Club

Netflix is expanding its early feedback program to more subscribers than ever before according to a report from The Wall Street Journal. Netflix’s early feedback program known as its Preview Club, is currently made up of 2000+ subscribers; however, the service plans to expand the program to include tens of thousands of subscribers worldwide starting early next year. The Netflix Preview Club began over a year ago and works as a sort of focus group. Viewers are given early access to a show or movie and then provide feedback through surveys and other exploratory methods to share what they did or did not like and provide suggestions.

Netflix previously saw a lot of success on the film Don’t Look Uppotentially thanks to its Preview Club. Netflix allowed a small group of subscribers to preview the film which found the film to be too serious. The film’s creators then used the feedback to tune up the comedy in the film which went on to get four Academy Award nominations as well as break a Netflix record for weekly viewing hours of a film. 

Netflix has recently moved to cap its annual spending on content at $17 billion. The company wants and needs to know that people are enjoying and will enjoy the content that they are spending all this money to create. Netflix also wants the relevant insights on how best to capitalize on their investments. Through this expanded Netflix Preview Club and allowing their subscribers to go behind the scenes and help influence decisions, Netflix will hopefully have a better idea of what their subscribers are looking for and be able to reduce churn and encourage long-term growth.

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Netflix Kills with First Big Theatrical Release of Murder Mystery, Glass Onion

Although Netflix has yet to report on the box office performance of their new film, Glass Onion: A Knives Out Mystery, sources are estimating that the well-received whodunit will be earning as much as $15 million during its week long run in 600 theatres across the country. Variety reports informed estimates of $13 million brought in by the film over the extended Thanksgiving holiday frame. Had Netflix actually reported box office numbers, Glass Onion would have placed third on domestic box office charts behind only Marvel’s Black Panther: Wakanda Forever and Disney’s Strange World, an impressive feat for the streaming service’s first venture into the movie theaters and box office world especially considering the fact that Netflix’s film was playing in a significantly smaller number of theaters than its competitors.

Netflix refused to agree to the traditional theatrical window when negotiating this deal with theaters earlier this year. The first film in the series, Knives Out, was released by Lionsgate in 2019, and opened to $26 million over Thanksgiving weekend before going on to earn over $311 million worldwide. Netflix acquired the rights to the series for $450 million and could have recouped some of that money had it let the film have a real chance at the box office. This marks a relatively new release model for streaming services which up until this point had released their content exclusively on their respective platforms. The COVID-19 pandemic saw films released on a streaming service after a shortened 40-day theatrical window, but never the other way around. Netflix’s success with Glass Onion’s release could see other streaming services try for theatrical releases with Amazon, owner of huge streamer Prime Video, already committing to making more movies for theaters. It will be interesting and quite ironic to see if streaming shifts to more movie theater releases considering that they had a large hand in their loss of popularity.

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Tyler Perry Sets Exclusive Deal with Prime Video

Tyler Perry has set a four-movie deal with streaming giant, Amazon Prime Video according to The Hollywood Reporter. Perry will write, direct, and produce four features which will premiere exclusively on Prime Video. Prior to this deal with Amazon, Perry had been working with Netflix with his two most recent movies, the new Madea film and A Jazzman’s Blues, premiering exclusively on the streamer earlier this year. Perry praised Prime Video for “welcoming him with open arms” and expressed excitement about bringing his projects to the global audiences which Prime Video can reach. Prior to his recent deals with streaming services, Perry had a first-look features deal with Lionsgate who released his 2019 film, A Madea Family Funeral, which earned over $75 million globally. 

This deal between Perry and Prime Video is not the first of its kind as more and more streaming services have begun signing exclusive deals with talent both in front and behind the camera in an effort to differentiate themselves and their content offerings. Netflix was one of the firsts to try out this model. The streamer has lucrative deals with Shonda Rhimes, Greg Berlanti, and Ryan Murphy whose recent hits Dahmer and The Watcher have proved that these deals are might just be paying off. Perhaps other streaming services will follow suit as original content proves to increase in importance. 

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Peacock Hopes to Score Big as World Cup Streamer

Peacock is hoping to gain subscribers by simulcasting all of the FIFA Men’s World Cup games in English and Spanish as well as offering them on-demand along with other supplementary programming. Rick Cordella, the president of programming for NBC Sports and Peacock Sports, told AP News that “he hopes the World Cup is another event that will drive more viewers to the platform”. Cordella hopes that users will seek out Peacock for its sports and then discover all of the app’s entertainment options, encouraging them to continue their subscription. With an anticipated five billion viewers tuning into the World Cup, Peacock has an extremely large pool of viewers which they can potentially turn into long-term subscribers. Not to mention that more US fans between the ages of 25-34 are planning to watch the World Cup on livestream rather than cable, so the opportunity for Peacock here is huge as they’ll attract the younger demographics and cable cutters.

A draw for streaming the World Cup over watching it on cable is the promise of deeper and more unique coverage than ever before. Peacock alone will not only live stream all 64 matches, but they will also offer a World Cup hub featuring a variety of supplemental programming including daily shows featuring highlights and analysis as well as an exclusive 24/7 channel throughout the entirety of the tournament. In an effort to garner subscriptions, only the first twelve matches will be available on Peacock’s free tier, and then users will need to subscribe to watch the remaining 52 matches. It will be interesting to see if this strategy helps Peacock maximize subscriber numbers while also minimizing churn. 

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Christmas Comes Early as Hallmark Programming Arrives on Peacock

Now that Halloween is over, Christmas is coming early as Deadline has reported that NBCUniversal’s Peacock and Hallmark Media are embarking on a new content deal. Starting on Wednesday, Peacock will feature a Hallmark page where users can stream Hallmark programming both live and on demand. Users will be able to watch all three of Hallmark’s channels including Hallmark Channel, Hallmark Movies & Mysteries, and Hallmark Drama live and next-day-on-demand as well as have access to a library of their original movies which includes their numerous holiday titles. Both NBCUniversal and Hallmark Media are branding this deal as a “first of its kind” as it includes both live linear channels and a subscription video on-demand library deal. Both companies are also hoping that this new deal grows their audiences and boosts engagement across their brands. 

While this deal is rare for its linear and SVoD components, it is also rare for its third-party content as Peacock has mostly built its service around content developed in-house at NBCUniversal. Just recently, Peacock began streaming programming next-day from NBCUniversal channels NBC and Bravo, and now they will introduce third-party content to this model. As Peacock continues to try to grow its consumer base, this deal with Hallmark should hopefully attract new subscribers as Hallmark has a hefty holiday season lineup sure to attract its beloved fans. And, with cable cutting still on the rise, Peacock may be the only means that a lot of consumers have to enjoy Hallmark’s content proving that this deal will definitely be beneficial to both parties. Perhaps linear and SVoD deals are the answer for cable television networks struggling to stay alive as streaming grows and turns consumers further and further away from cable.

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Netflix Cracks Down on Password Sharing

Netflix warned about a crack down on password sharing back in April, but this nightmare is finally coming to life in early 2023. Starting early next year, Netflix will begin charging people to share their accounts. Netflix will now only allow one “home” per account, and any additional home will be required to pay an extra charge to use the same account. Netflix has not revealed how much this surcharge will be, but customers in Latin America where this model has already been rolled out were required to pay $2.99 per month per additional home. Different plans will have different rules with Netflix’s basic plan allowing only one additional home all the way up to their premium plan allowing up to three additional homes. Travel is accounted for in this unfortunate update with Netflix promising that you can still access your Netflix account and watch your favorite shows outside of your home on a tablet, laptop, or mobile device. Even after this new model is released, each account will still be able to hold up to five profiles, so individuals in a household can still have their own separate profiles with individualized recommendations. And luckily, if someone is on their friend’s account, they have the opportunity to export their profile to a new account so that their data and recommendations follow them to their new account or subaccount.

Netflix has faced a lot of backlash for this decision to charge for password sharing with Peruvians trending the hashtag “#ChauNetflix” after the crackdown in Peru in late March. Netflix has been on a downward spiral recently losing its spot as the most-subscribed-to streaming service to Disney as well as losing many subscribers due to a number of reasons ranging from high subscription prices to growing customer perceptions of unsatisfactory content. Only time will tell if this crack down on password sharing will help Netflix by increasing revenue or hurt it by leading to subscriber losses.

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In Streaming, Original Films and Series Alone Aren’t the Draws They Once Were; Games, Sports, News & Audio Should Also be in the Mix

Since Netflix introduced the first streaming service original, House of Cards, in 2013, all streaming services have followed suit introducing their own original content and seeing great success through these originals. Offering original content is a significant way in which streamers can differentiate themselves and attract consumers. However, new research is revealing that original content is not going to be enough moving forward; rather an expansion into sports, video games, news, and audio should be the future of streaming.

When looking at the market of users between the ages of 18-34, the numbers get even more interesting. In this demographic, gaming and music/podcasts are even more favored with 15% and 16% of the pie, respectively. Evan Shapiro, former cable network chief turned producer, professor, and industry consultant, tells Deadline that movies and TV are no longer a differentiator, and that if they are all that streaming services have, these services are pretty much guaranteed to not see long-term success. With churn remaining high (over 60 % of streaming customers canceled a service last year) and even the most popular streaming services suffering through hard times, attracting and retaining customers has never been more important. Shapiro further discusses how “it’s no surprise that the two streaming players with the most data—Apple and Amazon—are both heavily invested in bundling numerous genres of services.” It’s almost like they know. Even newborn Paramount+ is considering a merger, and they already have music covered with their MTV Unplugged revival. So, streaming services are truly in a new era. When broken down by age group, streamers aged 18-34 showed the most willingness to pay for entertainment content, so as arguably the most important market, they should definitely be given what they want which is films and tv, gaming, music/podcasts, and sports, and only then will they be satisfied and streaming services safe and sound.

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A New Era of Slower Streaming Growth Has Already Begun

Although streaming has enjoyed recent global expansion and is the most popular way to consume entertainment nowadays, the last financial quarter saw the slowest growth yet for the majority of major streaming services. According to Variety, Netflix experienced its largest decline to date, losing 1.3 million subscribers, and Disney+ and Peacock experienced lackluster and stagnant growth, respectively. And as for Warner Bros Discovery, HBOMax and Discovery+ lost a combined 300,000 subscribers in the last quarter alone.

Consumers are still adding subscriptions though much less than before. There were a total of 31 million gross additions in the United States in Q2 which may sound like a lot but that figure is down 18% from Q1 with cancellations remaining steady at 28.5 million. A potential explanation could be the high level of household penetration meaning that streaming just doesn’t have many more houses to enter or rooms to grow into. These numbers are concerning for streamers, but streaming is probably just entering a period of stability. As services adjust to the slowing growth and streaming transforms into a more stable, long-term business, streaming giants are scrambling to find new ways to judge how their service is doing, and the metric of choice for many has become average revenue per user (ARPU). With ARPU, streaming giants can monitor their revenue and cash flow growth more closely, and take some pressure off of gross subscriber numbers as this metric ignores non-revenue consumers such as those on a free trial. However, streaming services should still strategize to lessen churn as it has become abundantly clear that it is going to take much more than just compelling content to not only attract but also retain subscribers and growth of any form. 

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Sources

I will be following the video streaming sector this semester as I feel like it is a very relevant and quickly evolving sector right now. The sources I will be following are: Variety, The Hollywood Reporter, and Deadline among others.