Being first to market doesn’t always mean you will always dominate that market. Commonly known as a cheap imitation of Oreos, Hydrox cookies are not an Oreos imitation at all, according to Business Insider. In fact, Hydrox came first and Oreo copied them, but through a better marketing campaign and a tastier name, Oreo surpassed the copied cookie and is now the most popular cookie in the world. Is Netflix, one of the first streaming services to hit the market alongside Hulu, threatening to become the hydrox of streaming?
Netflix hasn’t been in the best shape as a company lately. According to Time Magazine, Netflix lost 200,000 subscribers from January to March 2022 and another 1 million in the second quarter. And that loss of 1 million subscribers is unfortunately good news, as the streaming giant predicted a loss of 2 million subscribers, prompting Netflix to lay off employees and introduce a cheaper ad-based subscription tier.
Seeking Alpha argues that the reason Netflix is struggling financially is that too many competitors have flooded the market, forcing Netflix to look not only at Hulu as it did in its early days, but also at HBO Max, Amazon Prime, Disney+, Paramount+ and Apple TV+ to compete, and a whole host of others. Many of these competitors are also affiliated with major studios, meaning they have large back catalogs of high-quality material and established relationships with big-name stars.
But now Netflix has gotten some good news for a change, and things could get better for the company.
Netflix reportedly gained 2.41 million subscribers
Netflix’s third quarter showed massive improvement, regaining the same number of subscribers it lost in the first half of the year and then some. According to Variety, Netflix regained 2.41 million subscribers in Q3 and expects to add another 4.5 million subscribers in Q4 as they roll out their new ad-supported tier then. However, the Variety article cast some doubt on that forecast, as it pointed out that a good number of people subscribing to the cheaper tier are likely existing subscribers who are downgrading their subscriptions.
According to The Motley Fool, Netflix was $14.5 billion in debt at the end of March. However, The Motley Fool doesn’t think this will be an issue any time soon. The debt has been used primarily to invest heavily in high-quality originals, and Netflix has done a good job of diversifying where it borrows money so that due dates don’t all come at the same time. Netflix won’t have any significant debt to pay off until around 2025, and it’s hard to predict what will happen once that time is up. That means it’s in Netflix’s best interest to keep growing its numbers over the next three years, and they seem to be hoping that the new ad-supported tier will give them just the boost they need.