Realisation

This happens, at times we realise something AFTER the fact and for some reason not before. The BBC gives us (at https://www.bbc.com/news/business-62158936) ‘Netflix and Microsoft team up for cheaper plan with adverts’, apart from the setting that they decided to trust Microsoft on this, the setting of movies or TV series with advertisements is called TV, The Dutch have channels one, two and three. The Brits have the same but they call it BBC One, Two and oh, four is ITV. And so every nation has its own version of TV, so why would we want Netflix when we can get the others for free? It comes with “It lost 200,000 subscribers between January and March, compared to the 2.5 million analysts had been expecting the firm to add in the period. Netflix also now expects to lose a further two million subscribers between April and June.” And this is a surprise? How? The covid era ended, people are expected to be back in the offices and do actual work. And those who decided to quit their jobs to be at home for whatever reason will soon be in a space where they CANNOT afford Netflix. Instead of offering an 8 hour segment (when they aren’t working) for less, and as such create 3-6 timezones to capture the bandwidth pressures, they decided to compete with local TV stations at a price, whilst local TV is free. I reckon (and that I merely my view) that the people will stop subscription TV, especially as some favourite series are spread over several providers. And these people will return to Channel 7, Channel 9, ITV, RTL+, Sjuan, TMC, TFX and the list goes on for a while. I reckon that they will not be too happy with Netflix and they will demand local based sanctions against Netflix. In addition, some will demand that the bandwidth usage of Netflix users will be capped or even surcharged to avoid congestion on several levels. It is not whether it happens, it will soon be on WHEN it happens. Especially when the Amazon and Google group could stick it to Microsoft, they will be enthusiastically motivated to do just that. 

Do I care?
Not really, I sometimes get a month subscription to load up on missed things and I have to as we all have budgets. I reckon that the UK is facing a much harder time. When they get to decide on two of the items (Food, Rent and heating) Netflix will be the first to go, and after that cheaper internet deals. The cost of living bites everywhere and Netflix should have seen this coming. I think they did not, because in all my dealings with Americans, they always avoided any discussion on market saturation, it was always the fault of the bad salesperson. This time around there is no escaping it, and I saw this setting in 2020 when I was clear about saturation, and they were all in the stage of ‘We never heard that’ but the stage was clear and Covid ended as such the good times were gone and now Netflix with their desperate act decided to rely on Microsoft. Whether these two are in bed because of the Netflix game streaming is unknown to me, but it would not surprise me. And that too will backfire on them when Tencent comes out to play. Tencent could muscle in on both Amazon Luna and Google Stadia as well if these two did not adjust their way of thinking. 

These players are all realising that there is one population and they can no longer afford EVERYTHING. These people have to make choices, some of them hard and depending on what TV brings instead of Netflix comes with $10 a month savings, for a lot of people it will be a simple choice. It is this realisation that governs the global population. If EU inflation is up by 8.6% (last month), how long until people have to select what food they can afford? This is not out of consideration at present, the UK seems to be going back to the daily fish and chips. In the Netherlands some vegetables went up between 29% and 34%, that is HUGE! It is in this setting that Netflix makes a move the way they did and at some point people will realise that they get the same by watching TV, which does not cost them $10 a month, and that was the only reason keeping them on Netflix. Realisation is a dangerous and ugly thing. Yes, we can continue to watch Netflix, but how long until those prices go up? Which will drive a lot of people towards their normal local TV stations again, some already did. 

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Filed under Finance, IT, movies

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