Netflix News

TV and movie lovers who have feasted on Netflix Originals like “The Crown,” “Stranger Things,” “Ozark,” and “The Queen’s Gambit” are about to get a lot more attention from the reigning streaming video king. 

According to a research report from Bankr, the service will spend about $19.03 billion in 2021 to produce exclusive video content, nearly 10 times what it churned out just five years ago when it first tested the original content waters with “House of Cards.”

Here we come, 2021!

COVID-19 didn’t hamper the company much, if at all. “Since the almost-global shutdown of production back in mid-March, we have already completed principal photography on 50+ productions and, while the course and impact of C-19 remains unpredictable, we’re optimistic we will complete shooting on over 150 other productions by year-end,” the company wrote in its Q3 2020 letter to shareholders.

To demonstrate its aggressive stance, the company said that it expects the number of Netflix originals launched to be up year-over-year in each quarter of 2021. A key target for that content will be an emphasis on Netflix’ burgeoning growth in the Hispanic and Asian markets. 

While the company said that it strives “to be a global entertainment service that can satisfy the needs of members all over the world,” it’s not leaving the English-speaking world empty-handed. Season 3 of Cobra Kai will debut on January 8, 2021. There’s also season four of ‘Stranger Things,’ the action film ‘Red Notice’ (starring Dwayne Johnson, Gal Gadot, and Ryan Reynolds), and season two of ‘The Witcher’ for fans to look forward to.

Go big or go home

If it walks like a duck and talks like a duck, then Netflix is no different than a traditional TV network like NBC, CBS, or ABC when it comes to competing for eyeballs. In addition to its 195 million user base, Netflix subscribers are rather smitten with the service, with 59 percent of young users rating it as their most indispensable TV network.

To push that number higher, the company has to go big or go home -- and it’s going big in 2021.

In reality, Netflix has little choice. In the last year, consumers have been wooed by the debut of Comcast’s Peacock and Disney+. Disney, in particular, has shown just how serious it is about being a big time player in the streaming game by adding in features like co-watching, bundles, and partnerships with the likes of Verizon, which gives the wireless network’s customers a chance to score a free year of Disney+.

“Overall, Netflix needs a lot of video content to remain competitive. However, the shows need to retain subscribers especially those onboarded during the pandemic,” commented Bankr’s Door Justinas Baltrusaitis. “If the subscriber growth slows down, Netflix might need to look for other ways to attract more users.”

Netflix has confirmed that it will stop offering free trials to U.S. customers. Instead of touting a free 30-day trial, the streaming giant has changed its sign-up page to emphasize that it lets subscribers cancel anytime at no cost. 

“We’re looking at different marketing promotions in the U.S. to attract new members and give them a great Netflix experience,” a Netflix spokesperson said Tuesday. 

Those promotions include content sampling for consumers in the U.S. For example, Netflix recently made one of its films (“To All the Boys I’ve Loved Before”) available to watch without a Netflix subscription. It has also posted some educational content on YouTube for free. The platform says content sampling promotions like these are expected to continue into 2021. 

The Verge noted that Netflix has spent the last couple of years gradually pulling the free trial option in other countries. Meanwhile, newer streaming platforms like Apple TV and Disney Plus have extended their free trial periods in order to grow their customer base.  

Netflix currently has more than 192 million subscribers. 

Netflix has announced that it will put 2 percent of its cash holdings towards supporting the economic development of black communities. The company said its initial commitment will be as much as $100 million.

In a blog post on Tuesday, the video-streaming giant said the money will go toward narrowing the financial divide between Black and White families created and perpetuated under the nation’s long history of systemic racism.

“Banks that are Black-owned or led represent a mere one percent of America’s commercial banking assets. This is one factor contributing to 19 percent of Black families having either negative wealth or no assets at all,” wrote Aaron Mitchell, a Netflix director of talent acquisition, and Shannon Alwyn, Netflix’s treasury director. 

To start, Netflix will move $25 million to the Black Economic Development Initiative, a fund recently set up by a non-profit called the Local Initiatives Support Corporation. The non-profit will invest the fund in financial institutions serving Black communities. Another $10 million will be deposited at Hope Credit Union, which focuses on obtaining funding outside of the underserved regions it serves. 

“Over the next two years, HOPE estimates the Netflix deposit will support financing to more than 2,500 entrepreneurs, homebuyers, and consumers of color,” the company said.

Supporting Black communities

Mitchell and Alwyn noted in their blog post that 19 percent of Black families have “either negative wealth or no assets at all,” while just 9 percent of White households fall under that category. 

“Black banks have existed to fight this for generations, spurring economic growth by extending credit in often underbanked communities,” the company wrote. “But they’re disadvantaged in their access to capital, especially from large multinational companies, when compared to other banks.”

Earlier this month, Netflix CEO Reed Hastings and his wife Patty Quillin pledged $120 million to Black colleges in response to the killing of George Floyd and the nationwide “Black Lives Matter” movement.

“Both of us had the privilege of a great education, and we want to help more students — in particular students of color — get the same start in life,” Hastings and Quillin said in a joint statement.

Word came down from Netflix corporate on Friday that inactive subscriptions run the risk of being canceled. The company is asking subscribers who haven't used the service in a year or more to let them know that they still want to be a member -- even if they're going to keep their membership turned off until further notice.

According to Netflix' Eddy Wu, the inactive accounts represent less than half of one percent of its overall member base -- about a few hundred thousand.

Expect a nudge

Netflix will be sending out email and in-app nudges over the next few weeks to find out what the dormant subscribers want to do. If the service doesn't receive a user's confirmation, their service will be canceled with no penalties or fees.

"If anyone changes their mind later, it's really easy to restart Netflix," Wu said. "As always, anyone who cancels their account and then rejoins within 10 months will still have their favorites, profiles, viewing preferences and account details just as they left them. In the meantime, we hope this new approach saves people some hard-earned cash."

CNBC's Jessica Bursztynsky called Netflix move "extremely unusual among companies that charge an annual subscription, and shows a measure of confidence in Netflix's value proposition for customers." 

Bursztynsky also thinks a little "hello, remember us" nudge may help Netflix retain some top-of-mind recall -- especially as new competitors like Disney+ and NBCUniversal's Peacock continue elbowing in for a piece of the streaming service action.

In a recent filing with the Securities and Exchange Commission (SEC), Netflix shared how many subscribers it has in several global regions for the first time. While the bulk of its subscriber base is still made up of consumers from the U.S. and Canada, the report shows that the streaming giant is growing quickly in other global markets.

In the two-year period between 2017 and 2019, Netflix increased its subscriber base in Europe, the Middle East, and Africa from just over 26,000 to over 47,000. In Latin America, that number jumped from under 20,000 to over 29,000; and in the Asia-Pacific region, it went from around 6,500 to nearly 14,500. 

Revenue generated from foreign markets also made a big leap in those two years. In those same three markets, overall revenue jumped from $4,081,357 to $7,080,948 from 2017 to 2019. In contrast, revenue generated in the U.S. and Canada moved from $6,660,859 to $7,379,300 over the same time period.

Expanding services and content

The findings underscore how Netflix has become more of a global giant as a streaming service. It is currently working on several initiatives that company officials hope will generate more excitement and draw in more subscribers. 

Earlier this month, the company said it was testing a new yearly subscription plan that could save consumers up to 50 percent if they paid in advance for a full year of service. The company also recently offered $2 billion in debt to fund content creation on its platform.

These initiatives and competitive pricing have made Netflix a hit with many consumers. In a recent ConsumerAffairs review of the service, Sally from Sarasota, Florida said that it can be a great alternative to cable TV. 

“Unless you have cable to access movies, Netflix has proven a winner with our family. Their list of outstanding movies, past and present, are always available, and at a reasonably low price,” she said.

To read more consumer reviews about the service, check out ConsumerAffairs’ page here.

On the heels of the launch of Disney+, Netflix appears to be mulling a change to its pricing plan options. A new, cheaper pricing plan is currently being tested in India, Reuters reports. 

Under the plan, new and existing subscribers who pay for a full year of the service can save 50 percent. Those who sign up for six months or three months of the service get 30 percent and 20 percent discounts, respectively.

When applied to the most expensive plan in the U.S. (the Premium plan), consumers would end up paying $7.99 per month if they opted for a one-time payment of $95.94. The Premium plan currently costs $15.99 per month.

"We believe that our members may value the flexibility that comes from being able to pay for a few months at once. As always, this is a test and we will only introduce it more broadly if people find it useful," a spokeswoman for Netflix India told Reuters. 

Competitive pricing

Although Netflix has said it’s not worried about competition from Disney+, the introduction of an alternative pricing option on Netflix would allow it to offer similar pricing when compared to its streaming service rival. 

Disney’s new service costs just $6.99 per month, or $5.83 for those who pay for a full year of Disney+ access. The service garnered more than 10 million subscribers at launch and could hit as many as 20 million subscribers by the end of the year, according to recent estimates from Credit Suisse.