Will Netflix Retain Its Leadership Among Streaming Services in 2022?
While most people are extremely excited to slowly return to their pre-pandemic habits and activities, this may not be good news for everyone. For instance, the streaming services that boomed during lockdowns may be lagging behind in 2022. Next, we’ll see what made Netflix the most popular streaming service in 2020 and what viewers should expect this year.
Is Netflix the Gold Standard for Streaming Services?
In 1997, Netflix started its activity by shipping DVDs to its customers via mail. A decade later, Netflix turned into the streaming service we all know and love today: it began streaming different movies and television programs via the internet.
With less than 500,000 subscribers at the end of the 20th century, Netflix now reports nearly 210 million members and is valued at just shy of $300 billion.
What led to its popularity during the pandemic is the inflow of original movies and series, documentaries, and even comedy shows. These kept subscribers paying for their favorite service, along with creating numerous successful series, such as “Squid Game”, “The Witcher”, and “Bridgerton”, among others. It further comes with kid-friendly programs, where children have access to a separate interface that blocks adult-oriented content. This made it an excellent choice for many families around the world.
However, despite the explosive growth in 2020, Netflix went into a downward spiral in 2021. On the one hand, its original productions that brought value to subscribers encouraged its competitors to do the same.
On the other hand, many subscribers felt less enthusiastic about Netflix’s premium subscription plans, ramping up demand for cheaper streaming services. For instance, according to Promocodius experts, a promo codes website, more and more people are looking for offers and discounts, including for streaming services. In Ukraine, the popular Megogo app increased its audience considerably thanks to promo codes that offered subscribers much cheaper streaming services than incumbents like Netflix.
What’s the Next Step for Netflix?
Not surprisingly, Netflix may not enjoy the same subscriber growth as it used to. While 2020 came with 37 million new subscribers, 2021 added only 18 million. This may seem an impressive drop since new subscribers are down by 50%; however, as people return to their pre-pandemic habits, it is not unexpected to see a suffering video streaming industry.
Things may not be as bad as they seem, though. Compared to the beginning of the pandemic in 2020, 2021 and 2022 will surely look bad. The first months of the pandemic had everyone locked inside their homes while consuming more content, so more and more customers subscribed to platforms like Netflix. Given this, it seems unrealistic to expect Netflix to ever match its 2020 performance.
Another point to be considered is that Netflix has already reached most of its audience. In the end, in the U.S., Netflix is so popular that there are not too many customers left to be added this year. One way may be to double down on its efforts to forbid people to share their accounts with others, so freeloaders will have to make their subscriptions.
One positive aspect is that Netflix expanded far beyond the U.S., and its global reach is nowhere near saturation. For instance, emerging economies like India have a strong potential to accelerate sales numbers. Also, Netflix estimates that the total reachable market is about 1 billion subscribers, and they only have about 222 million now. This leaves a massive potential for further upside this year.
That being said, Netflix may lose its crown among streaming services in 2022, especially as much cheaper services, promotional offers, and discounts come along in an attempt to gain market share. It is important to keep subscribers paying each month by providing engaging content. However, making wide global market moves to attract more subscribers can be time and resource-intensive, so it may not materialize this year, especially as people focus on outdoor activities and traveling to make up for the missed opportunities due to the pandemic.