Netflix shares decline after reporting disappointing subscriber growth
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Kinda sucks when shows leave Netflix and don't get replaced; half the appeal of Netflix is the ability to quickly switch between Futurama and Always Sunny, and more importantly to be able to watch those shows on a platform that doesn't completely suck (FX's app has got to be one of the worst apps I've ever used). When "Parts Unknown" was about to leave Netflix, I really questioned whether it was worth keeping my subscription. It feels like it's happening at an accelerated pace in the last couple of years.
The original content is good, and I realize that those shows leaving Netflix is probably more about Fox/CNN than it is about Netflix, but still makes me less interested in Netflix nonetheless.
I'm on the verge of canceling it, since most of what I want is on Prime anyway.
I actually think they’re going to be in a lot of trouble a few years down the line as their catalog is going to be a handful of great originals, tons of garbage originals, and a bottomless pit of Z-grade studio films.
Netflix is producing all of their own shows precisely so that they will no longer be held hostage by other license holders. Of course, now everyone doing the same thing, and consumers are left having to subscribe to a ton of providers (even when said providers currently are in a "drought" between seasons of your favourite shows) and jump between apps to get what they want.
(As an aside, Hulu stands out here in providing a "pause" button on your subscription. But it's month-based, and you still have to manage that yourself; it doesn't automatically credit you for those months when you didn't use the service.)
- Audio previews make it so I never want to browse for what to watch next. I hate having to fumble with my tv/home theatre remote because of this.
- If you leave it hanging, the previews count towards a watch! Wow. God help you if you wanna make some popcorn.
- Their sorts are always shuffled around, pushing whatever content is on their agenda.
- Im bilingual, and I can’t belive there’s no way to turn off captions for some of their shows. I can’t watch a show like Narcos without having subs for either English or Spanish. This might sound nit picky, but bilinguals aren’t exactly edge cases, either (SV is full of bilinguals!)
I’ve talked to some of their UX designers, and data seems to rule all there, so they wouldn’t be doing what they’re doing if it didn’t help them. But damn it is infuriating. Crazy that my favorite netflix client is the one Apple designed for them in the older Apple TVs
There are so few configurable items in their Netflix menu.
On the Apple TV app, at least, the "Are you still watching" message is still there.
I also find it infuriating that when we watch a kids film, your immediately shown a preview for another film during the credits.
I get it, but I wish there was an option to turn them off.
Wild conjecture: A paucity of things to recommend, combined with a desire to not concede that there are only like 3 things left I haven't watched yet but would be likely to give 5 stars, prompted them to first tweak the recommender's calibration, then eventually to wholesale switch to a metric that blurs the distinction between, "Yeah, I'll watch it", and "That was great!"
Such a strategy would get you more addicted, but also allow them to stretch their supply of subjectively-five-star-rated shows at the same time. It’s win-win ...for them.
They're building it back up with their private content, but, quite understandably, only in some very focused areas - presumably, the stuff that they expect to have the widest appeal. They originally built their business on basically owning the long tail, but now they've been forced to forsake it.
I think that's where a lot of the discontent is coming from. Folks are realizing that Netflix has turned into something very akin to the Blockbuster outlets that everyone had once cheered them for running out of town.
My favourite example is Die Hard, which was translated to Polish as "Szklana Pułapka" (a glass trap). Presumably because the action took place in a skyscraper. I just wish I could have seen the faces of TV execs when they learned that Die Hard 2 came out, and was about airplane hijacking.
My favorite example is Zootopia, which got changed into Zoomania for the German market.
Same. In Spanish that title was translated as "La Jungla de Cristal" (The Glass Jungle). There seems to be some common agreement here :D
Autoplay is another pet peeve, I like the feature but if I fall asleep then netflix considers the show watched and removes it from my continue list.
The worse it get's the more I'm tempted to go back to less legal means of acquiring content, then I can watch it in any player without an arbitrarily gimped resolution.
The complaint here is different though. Netflix-made shows seem to be deliberately designed so that all plot subpoints get dragged through the entire season. Each episode will introduce something, later episodes will occasionally remind you of it, but you have to wait 'till the very end for everything to be simultaneously resolved. Basically, what would be a classical story arc gets stretched in a way that 90% of its mass falls into the last episode.
(And then the resolution turns out to be meh, and you end up wondering why did you just waste 10 hours of your life on this show. It's quite like modern journalism - a bit of clickbait at the beginning, then a long article giving exactly zero useful information, and then a meaningless conclusion at the end.)
Discovery is impossible — imo they overoptimize for engagement and make it hard to explore the catalog. I find out about many new shows via PR placements in newspapers.
I'd just like a big table of everything available with meta-data in columns and the ability to hide rows
On a whim I switched over to my step father's profile - holy shit! There were at least 15 movies I wanted to watch that I absolutely could not get to show up on my profile without searching by name. I found a handful more on other family member's as well.
If we weren't on a 5 person family plan I would have cancelled long ago because from what they will show me there isn't any to watch.
I don't know how many good titles I discovered browsing random titles in video stores back in the day.
There is this hypothesis that I've seen floating on HN at times, that Netflix does this to hide the fact that their selection is very small. I'm not totally convinced, but a lot of their UI choices feel like good evidence in favour of this hypothesis.
You could hide episodes you've seen or entire seasons up to entire shows. Would fix a lot of the issues I'm having.
I want outstanding content regardless of topic and these days Netflix seems to be delivering less of that or at the very least makes it incredibly hard to find in a sea of mediocre content.
Trying to find actual hidden gems on Steam or iOS is a nightmare, to the point where I waste the time I set aside to play games because I'm looking for one instead. Same with Amazon, the best it can do is "people who bought this product also bought this other sort of related product."
I also agree that UI like Netflix currently has -- big giant vaguely descriptive rectangles that only fit a handful on screen at once -- make discovery super discouraging, since it becomes tedious to scroll through everything and find more info about it.
There are all sorts of inconsistencies with subtitles and dubbing. For example, suppose a show has options for 5 languages, but not Portuguese. If you switch your profile to Portuguese (i.e., by logging to the Netflix website and selecting Portuguese as your main language), then lo and behold Portuguese appears as a choice for subtitles and audio for many shows where it wasn't offered before.
Another irritation when trying to learn a foreign language is that foreign subtitles and the foreign audio often don't match. They are both correct translations, but it's as if they were translated by entirely different people. Maybe Netflix gets the subtitling done by one agency, and then later, if there's enough demand for the show, they get dubbing done by another agency (but don't update the subtitles to match the new translation).
Yet another oddity is that, on rare occasion, they will take away a language choice they offered for a show. A show might have, say, Polish as a audio option, but the next day it's gone. Completely puzzling.
This is industry standard, not specific to Netflix: - subs are generally direct translations of the script/transcript - dubs are often done by mouth-movement matching to make it look right
I would agree that the language tools on Netflix are unnecessarily bad.
They wouldn't be doing what they're doing if it didn't help them in the short term.
Data is great but you never have a perfect picture. What boosts your numbers in the short term could be the thing that makes your customers resent you and move on in the long term.
"You make what you measure" cuts both ways.
Data is only part of the equation. The other part is what you look at, and yet another is what you aim for. The data might tell them that bilingual users are not being properly accommodated by the service (or may not tell that - after all, in what way are you giving this feedback that would also show up on Netflix's surveillance panels?) - but then the business people will say that already subscribed users are less important than getting new subscriptions, and this problem will have to wait.
EDIT:
> Their UX has been on a steady decline for me
Agreed. It's less clear, and it seems to be optimized for Internet equivalent of channel hopping. For people who know exactly what they're searching for, Netflix becomes more and more difficult to use.
Also - and this really annoys me - their UI changes tend to make the interface heavier each iteration. It's not a problem when I use it on my desktop, but then sometimes I'd like to watch a movie on a tablet (e.g. when in a hotel), and then I have to face the absolutely ridiculous situation, in which a full-HD movie seems to cause smaller load on my device than the interface to select what to watch.
I cancelled Netflix a while ago, I hadn't been watching it for a while but assumed the rest of my family was. Eventually got around to asking them and it turned out they hadn't used it in a while either. Turns out we all just kinda lost interest. I remember when streaming first came out I was excited to "see what's on streaming," it felt like so much content to explore. Then it gradually became: "let's see if I can find something tolerable on Netflix before I go to bed." So many nights I started 5 different things, giving up on each to start something new, before I eventually just gave up on Netflix all together and went to sleep.
Part of the problem, was that their content came to all feel bland in the same way to me. But I also think they slowly broke my media consumption habits. I remember the days of Blockbuster when you had to pick one movie, and then you were committed. Which meant I almost always finished the movies. Many times I'd watch them twice. Netflix creates this persistent FOMO over what you could be watching. Eventually, I just stopped watching anything.
1. Continue licensing content and be subject to the whims of the content creators who can destroy their margin by increasing fees. The content creators can also start their own streaming services like disney is planning on doing eating into that market of streaming.
2. Create their own content eliminating the 2 main risks in option 1.
Option 2 is really the only viable option even if competition for content will likely result in content providers (HBO,Showtime,Netflix,Amazon...) not making much profit as the industry goes towards more perfect competition.
Why would Disney or Comcast want Netflix to fail when it's a boon for them currently? Sure, they'll aggressively negotiate the best deals for themselves, sure they'll plan for a backup in the event Netflix would ever stop leasing their content, but why kick a cash cow in the teeth? It's bad business.
If anything, Netflix jumped the shark cutting their cheques to the providers and creating their own content.
See Pandora for a lesson in what happens when a content distribution company has no pricing power with their suppliers (content producers). Note that Spotify has been paying attention. [1]
1. https://techcrunch.com/2017/02/23/spotify-expands-its-push-i...
Netflix needs to give subscribers a reason to keep their subscriptions going and if licensed content goes away they're going to need compelling original content to keep their subs interested.
https://news.ycombinator.com/item?id=16937290
The moment they announced the price hike, it's like something cracked in my rationalization to maintain the service, and every adverse complaint I've ever queued up in my mind against the service floated right to the top.
I'm on the verge of the same with Netflix. If I see a price hike, I'll quit just the same. They've been losing far more content than they've been adding.
...which I'd be happy to do. The production shops behind the prestige and niche films these streamers are lapping up for fixed fees (something like n% of budget paid to the production house, where n is a value over 100) are utterly crippling the production of quality titles that aren't things like event pieces or sequels.
As the good production houses dip because of the rates the streamers are paying, you're more frequently being left with new or inexperienced production houses filling the void, producers with less experience IDing the creatives (writing/acting/etc), finding directors who can cast successfully, doing accurate budgeting, etc.
I'll stop short of turning this into too much of a rant. Basically: the Netflixes and Amazons of the world have crippled the business case for an entire class of motion picture and subverted the quality of output in this class as a result.
I was noticing I was ordering far less recently (mostly settled in the new house now), and the fact they still refuse to support Chromecast meant Prime Video was useless for me. The price hike was the final nail.
I stopped renewing Prime when they announced the most recent price hike. It runs out in a week and I already don't miss it. If I need something in two days I'll pay for two day shipping. In all likelihood I'll save money this way.
You see, I initially subscribed to Netflix because it had most of Star Trek on it - all the TV shows + many (I think most) of the movies. The ability to watch an episode every now and then was what kept me subscribed even through the periods I couldn't find anything else interesting there. Now, recently came a time I actually wanted to watch a Star Trek movie I loved ("Generations"). I looked for it, but it was nowhere to be found. Just gone. So was "First Contact". So were all the others (except the bastardizations of JJ Abrams). This prompted me to ask, what other (non-Trek) movies and series I loved and even watched on Netflix are still available? Turns out, the list of movies and series has been gradually decreasing behind my back. A lot of the interesting things I watched on Netflix, that I used as an argument to recommend Netflix to friends, are simply gone.
Torrents cause a PITA with storage management, but have this one lovely feature - once a file is on your hard drive, it stays there. And this generalizes to SaaS vs. local software and files, too.
Same reason why I still buy my music on actual CDs. Sure, I rip them once and only use the files afterwards, but I can be assured that no matter what happens to my backup, I'll still have a large chunk of my music collection available in 30 years.
I've used Prime and Hulu before but they seem to have the same issue from time to time. The obvious alternative for me is to rent the content from Prime or iTunes (I have an Apple TV so my options are somewhat limited), but at $3-$5 per rental that's 3-4 movies on Netflix before I get my money back. I think I watch that many but I'm not sure. I watch a lot of crap I wouldn't otherwise that I feel like I'm settling for, but on the other hand Netflix is just my ticket to zone out and stop thinking about other stuff, so it does the trick.
As an aside, their taking of a political stance has led to a small but visible American chunk leaving, or at least claiming to.
I’ve recently got an HBO subscription and the difference in quality is staggering.
It will be interesting to see if Netflix imposes some kind quality bar to ensure things don't go even worse.
I wonder how this will evolve. Short-term, it looks like self-destructing greed to me. People are not going to subscribe to shit ton of services because each of them has a small slice of movies they might want to watch.
The too-many-subscriptions problem could be solved in a variety of commercial ways, like simply offering charging for how much you watch rather than a flat rate.
In Germany, the basic HD TV package costs €60/year (not per month) if you want it. And also you have to pay €18/month for the public broadcasts (that part is non-negotiable). So that comes out to €23/month if you're watching over satellite. Cable TV sometimes imposes additional fees (€8/month in my apartment building).
There is also Sky, a pay-TV provider, but I don't know any subscribers except for soccer fans and sports bars.
Basic TV in the US is free. Basic cable is about $30/mo. Case bundled with Internet is $50-100. There are some premium equivalents to Sky that top out around $200/mo. About 75% of US households pay for TV in some way. I’d say our mean and median household spending on TV is higher but there is a greater range of pricing, with $0 being quite viable if your tastes are simple.
The usual reason in a normal product market would be efficiencies developed over time reducing costs and competition driving prices down to marginally over cost.
The difference with movies/series is that the licensing situation is significantly more retarded. This will probably end up meaning we will end up with a million different streaming services (with different catalogues for different countries, or more accurately a good catalog in the US and a poor one everywhere else). This will drive more people to pirating, with predictable results.
"Netflix stock plunges to only +24% in 90 days"
In fact, I liked Netflix so much that I cancelled it because it was becoming a distraction. If I have kids they definitely will not have access to any such thing, and I feel sorry for the kids growing up with it today.
If your version of self control is fully disconnecting, I understand that but it doesn’t mean you should feel sorry for kids that have access to Netflix.
(Speaking as a 21 year old who spent a number of years of my childhood watching Netflix with my family)
I think children are by nature more impulsive, and if they have access to Netflix at a young age without enough parental restrictions they might start down a bad path. When they're older it's easier to contain.
That's part of the reason for age restrictions on drugs/alcohol. Some drugs aren't all that different from dopamine inducing digital stimuli. The prefrontal cortex, which is responsible for self control, isn't fully developed until age 25.
I don't at all agree with your "children should not be exposed to things they might want" premise, but that is a discussion for another day.
Also, anecdotally, I only have so much time for 'prestige' TV. They cover Delhi and Youtube in ads everytime they have something to announce--Altered Carbon, which I watched, but then they had Lost in Space, Wild Wild Country, and now a show set in Mumbai called "Sacred Games"--while it's great for subscribers to have a wealth of new material to watch all the time, there may be an inflection point beyond which producing/acquiring more content doesn't grow their audience...
irrelevant when that equates to 10% of the population.
And about that not making sense, I meant that it would be cheaper than paying for cable TV
Is the Netflix catalog the same worldwide? I was under the impression it varied based on the country your subscription was based in, due to licensing (different companies own the distribution rights for the same content in different countries).
If that's true, the problem you describe may not exist. An American trying to save money by subscribing to an Indian plan priced cheaper for the local market may just get Indian content, which may not be at all want he wants.
[0]http://www.iphoneincanada.ca/carriers/wireless-carriers-high...
Every time I log in, there’s a big wall of 20 posters I’ve seen a thousand times and never clicked on once and have zero interest in.
And the whole user experience seems about finding my way around that wall.
I can find stuff I’m interested in, but the platform never surfaces it for me. I always have to dig.
I always use the feedback system, too.
Netflix always brags about paying mid-six in pure salary and hiring top of market. Their internal presentations on content discovery and demography are something people tell stories of like they glimpsed a magical relic or something.
As a user I honestly cannot fathom where all that money and research could possibly be going.
Maybe my account is broken or something.
Netflix knows this so that's why they go great lengths to keep series like The Office and Friends, btw, both owned by Comcast...so you can guess why Netflix is cheering for Comcast to win that Fox bid...
Hulu has The Handmaid's Tale and HBO has Westworld but that's about it.
But I often don't use HBO for months at a time. That's pretty rare with Netflix these days - my watch list there is a huge backlog.
I ended up dropping the subscription because I'd watched everything interesting on the service in no time flat. I could have been watching Tales from the Crypt for months, but it wasn't available at all. Where is the Rey Bradbury theater? Shows I'd heard about growing up but only got to see briefly in a hotel room on a trip. For a service nearly twice as expensive as Netflix they made seemingly no effort to keep me engaged.
That's the thing with Netflix - objectively, it's the best streaming service available. The complaints are mostly relative to what they could be, and about the direction in which they evolve.
As for lack of content: my family is trilingual, and we constantly moving between countries. It's almost impossible to get content we like outside of US (even Australia sucks), these unbelievably stupid and shortsighted ideas of distribution regions (for DVD/BD) and DRM (for streaming) keeps me on torrents for 20+ years already, and I see no end to this ordeal. I tried to "go legal" on so many occasions, and EVERY SINGLE TIME I stumble upon some ludicrous "new tech" that prevents me as a consumer to watch content I like.
When will the studios realize that ALL content is out there already? And literally NONE of their effort since DVD css stopped anyone from "stealing" anything.
I can get any movie/show from torrents in max quality, but I would like to just pay $15 to someone and stream FullHD/4K content in any language to any device, and finally stop pirating stuff. Too much to ask, Netflix?
Music industry learned this lesson hard way 10 years ago, unleashed unlimited HQ streaming, and now look -- music piracy is nearly extinct, and both listeners and industry are happy.
In the meantime, I'm filling my 4TB hdd with BD remuxes and enjoying 4k videos w/o paying any cent to anyone. No other way around it for consumer, it seems.
Having said that, I feel Netflix's biggest problem is content discovery. They have the best multilingual content that can be consumed globally like Narcos and Sacred Games. Yet they make it really hard to find such content. Their categorization is weird and not easily understandable. But what really bothers me is that their content preview is just a short paragraph. So you are asking viewer to watch 10hrs of content based on a short paragraph ? I would prefer a lot more info about a particular show before I commit to it. Info such as critics reviews, rotten tomato and IMDB rating, popularity in native country, more detailed description of the show, similar shows, etc etc. Basically I have to go ask r/television about a particular series or movie on Netflix before I start watching. I am pretty sure this leads to a lot of user frustration and ultimately cancellation
Netflix has so many Indian language movies, and yet it is so difficult to search content just by the language or sub-region (South Indian)
[1]: https://www.theverge.com/2017/8/9/16118694/disney-bamtech-es...
The time of even more fragmented streaming offerings (and more selection) is soon.
Comcast is an interesting study here too. They are pushing ip based linear TV hard right now. I don't like the company, but they seem to know what they are doing.
Netflix has enough India specific content in the pipeline, and only one of these “made by Netflix” series has been released yet.
If there is one thing Netflix does good, it is the focus on content that is relevant to the region, without compromising on the language and characters.
Another recent thing in India, is the plunging broadband prices in India, especially wireless (4G LTE, 2 GB per day, for 89 days costs less than $10 <head explode?>).
Netflix, Amazon Prime and other streaming video options are going to get more signups soon, especially from the younger population that may not have a TV at home, but will certainly have a smartphone and/or a laptop. For them, Netflix is certainly a cheaper option, especially if you divide monthly cost of the top tier plan ₹800 by 4 = ₹200 which is certainly bang for the buck compared to cable tv, that you can watch only at home.
The only disadvantage for Netflix is for those who prioritize watching sports, which is still a major reason for people to subscribe for cable.
Until the recent price war on 4G/LTE/5G pricing (in early 2018) that has led to dirt cheap wireless internet access, I thought Netflix in India was a wrong move. With such cheap internet access, Netflix and other streaming video platforms certainly have a huge growth phase from the next quarter onwards.
Watch out for Netflix growth numbers over the next few quarters in India. I'm extremely bullish of Netflix in India and I'll be shocked if Netflix fails to grow from here onwards.
Also, the diminishment of the back catalogue (and the fact that so much of it is SD--not their fault) is negating one of their biggest selling points.
That's no different from regular TV. We were spoiled in the early years of Netflix streaming because they could cherry-pick license all the good stuff from earlier for cheap. Now they have to go on the same "fund a bunch of stuff, discover some hits" journey that all the other content producers have gone through.
On the plus side you can watch anything you want on demand, there are no ads, and the website and apps are fast. And you don't have to pay $100/month for a cable bundle with shitty customer service.
If there's some show or movie I'm really missing, my local public library does a great job of filling that need.
Even Netflix' premium original content is getting monotonous. Where it -- or, more broadly, "Netflix" branded content -- is not simply getting stuffed full of "quantity over quality".
I've been feeling like I should have pulled the plug, a while back.
And yes, per other comments here, someone needs to... "have a talk with" their UI people. Not helpful, recent changes.
In general, they'd have to lose shareholder/board confidence in company direction, which won't happen anytime soon.
Netflix is competing for talent as a FAANG outfit, and as such much of the value they provide to their employees depends on their RSUs. This works great as long as stock price is on a steep rise, as has generally been the case for FAANG over the past several years.
Now that the price is on a downslope, though, we should expect their compensation package to be less competitive than other tech companies, and especially FAANG.
Will they be able to deal with it somehow? Or will their top talent migrate to more successful tech companies that can pay as well as Netflix did while its stock was rising?
1. https://www.quora.com/How-does-Netflix-compensate-its-employ...
Furthermore, the link you provided also states that since 2015, there's a compensation factor that is non-voluntary and pegged to the price of the stock, so everyone will see a reduction, though some more than others.
You're probably right. I think it will become interesting once a FAANG starts losing enough stock value and cash that compensation is no longer competitive and cannot be adjusted.
My sense is that retention relying on constant and substantial stock appreciation is inherently dangerous for the employer, because it means that if their stock value plunges, their woes will be compounded by almost immediate talent exodus.
This is not yet the case for Netflix, which can still pay well.
Right now I’m down several thousands of dollars on NFLX, which could have easily been a few international vacations. It’s not the first time or last time stuff like this happens, but everything was rallying so nicely the past few days it’s a shame to see that get back tracked. And of course, other tech stocks are down with it which also adds to the pain.
Just stick your money in Vanguard index funds and forget about it apart from rebalancing once a year.