Netflix, the front-runner of streaming, had its stock price drop 35% in one day after an extended period of it decreasing. The market cap of Netflix — or overall value on the stock market — dropped 50 billion dollars.
The crater Netflix has dug itself into reveals how streaming services must cut back on their spending and create unique programming in order to keep up with competitors as well as outside forces like Twitch, TikTok and YouTube.
This decline can be attributed to a decrease of hundreds of thousands of subscribers. Foremost among the various factors leading to the decline is the rising price of subscriptions and a changing market suffering from inflation.
Netflix’s model is still in flux, and the owners have expressed plans of including advertisements and not spending so much on projects like “The Irishman” by Martin Scorsese, a movie that cost around $170 million to produce.
Over at Warner Bros. Discovery, new CEO David Zaslav made headlines for cutting projects left and right. The most well-publicized example of these puzzling decisions is the axing of DC’s “Batgirl” project.
Spending $90 million dollars to bring the film to near completion as an HBO Max original, the film had already been barred from theatrical release. Unfortunately, the new regime bafflingly canceled “Batgirl” before it could spread its wings.
Conversely, competitors Disney, Amazon and Apple all possess other sources of revenue and hands in other industries that allow them to spend big on streaming.
Amazon’s new series “The Lord of the Rings: The Rings of Power” cost a billion dollars to produce, and the retail monopoly has said that if it does not become a success, then none of their studios have what it takes to deliver good content.
However, the high quality of programming and effects cannot be replicated anywhere else and therefore justifies large budgets. It is a delicate position that these services are finding themselves in. Can these corporations afford to spend so much?