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Saturday, April 13, 2024

Hollywood troubled: Netflix emerges as “the Global Platform”

While Hollywood and Bollywood have suddenly come to a halt, Netflix has added almost 16 million new subscribers in the first quarter of 2020 emerging as the new global platform with 200 serials under production from studios all over the world. An "Entertainment Revolution" is taking place.

While coronavirus has brought Hollywood to a halt, Netflix has enjoyed record success adding almost 16 million new subscribers in the first quarter of 2020 – raising expectations about its future potential and forcing top management to explain to shareholders that growth patterns need to be fully understood.

CEO and his team are at pains to explain that most subscription spikes have happened in the month of March when Europe, Asia and North America faced unprecedented lock downs – forcing people to sit at homes.

Europe & Asia emerging as the fast growing Netflix Markets

Most of that increased subscription has happened outside the North American market – where Netflix faces stiff completion from other streaming services like Amazon and Hulu. Biggest jump happened across Europe where lockdowns started to happen in the first part of March. Almost seven million new subscribers have joined across Europe and Middle East.

Almost 3 million new subscribers have joined Netflix across Latin America and 3.6 million in Asia. Even before the jump India had more than 4 million Netflix subscribers as compared to only around 150,000 in Pakistan. India’s new numbers are not known at this point.

In North America – where Netflix faces competition from other streaming services like Amazon and Hulu – around 2.3 million new subscribers have joined in first quarters of 2020 as compared to around 548,000 in last quarter of 2019 and around 1.9 in first quarter of 2019.

Share prices have jumped up by 1% within few hours of the quarterly results and more swings are expected. At a time when shares of most S&P 500 and Nasdaq are down, streaming services are the only industry where share prices are rising – demonstrating the impact of corona pandemic on fortunes of businesses.

Netflix’s Production challenges in new emerging situation? 

But industry analysts now question: will the streaming giant’s well-stocked slate of future shows be enough to maintain that growth?

Netflix announced this week that it has finished filming the majority of movies and series due for release this year, playing down concerns that its flow of hit shows such as “Tiger King” could run dry, or the next “Unorthodox” be delayed.

“Our 2020 slate of series and films are largely shot, and are in post-production remotely in locations all over the world,” said Netflix content chief Ted Sarandos. “And we’re actually pretty deep into our 2021 slate. So we’re not anticipating moving things around.”

Analysts say Netflix’s scale, in terms of its sheer number of ongoing productions and global presence, make it best-placed to weather the pandemic storm.

Read more: Samsung TV Plus: Samsung launches Netflix alternative for its users

“Any other studio… might have four or five films in the can, or in post-production that they can still work on. But Netflix has possibly hundreds,” said Jeff Bock, senior analyst at Exhibitor Relations. Wall Street Journal, United States’s biggest business publication, points out that more than 200 serials are under production, by Netflix, in different locations. In this respect Netflix represents an Entertainment Revolution.

“There are so many productions that are financed by Netflix, it’s almost mind boggling. They’re almost putting out as much content as all the studios put together.” Analysts point out.

The deep-pocketed platform can also turn to its vast network of overseas partners to license content — often subtitled — for domestic audiences. Productions are emerging under license from India, Middle East, Hong Kong, Latin America and even Israel.

But even Netflix has limitations

But even Netflix’s content pipeline has inevitable limits if an unprecedented shutdown nobody could have predicted extends much longer.

“They like to put out a lot of content, each and every week,” said Bock. “Maybe as we go along into the fourth or fifth month in terms of lockdowns… they certainly will be ahead of the game, but they’ll certainly be hurt.”

New, original programming plays a bigger part in Netflix’s appeal than rival platforms like Disney+ — home to the Mouse House’s enviable 80-year back catalog.

“People are, in a sense, distracted by all the archival content — they can watch shows over and over,” said Paul Dergarabedian, senior Comscore analyst. “There’s a lot of buffer there.”

With the streaming wars heating up, Netflix has lost evergreen hits like “Friends” and “The Office” to upcoming rivals HBO Max and Peacock.

The delay of this summer’s entire movie theater blockbuster slate also means those films will arrive later at streamers such as Netflix, according to Steve Nason, research director at Parks Associates.

Read more: Brazil supreme court sides with Netflix over gay Jesus comedy

“Maybe not in the short term, but in the longer term, that hurts Netflix,” he said.

Still Netflix haas better chances than others

But Netflix has another tool at its disposal: its ability to find ways to keep making new content.

Thanks to rapid global expansion, Netflix is now ramping up production in countries that are easing restrictions — namely Iceland and South Korea — while Hollywood remains closed.

“Certainly the Netflix brand is worldwide — there’s no reason why they can’t buy their own island honestly and shoot things there,” Bock told AFP.

Its recent successes in reality TV, such as “Love is Blind” and “Too Hot to Handle,” point to avenues requiring smaller crews and with rapid turnaround times.

Read more: Fawad Chaudhry calls Amazon, Netflix to invest in Pakistan’s drama industry

Netflix quickly capitalized on the phenomenal success of surreal zookeeper documentary “Tiger King” with a follow-up episode featuring interviews with show alumni conducted via low-budget video calls.

“A lot of different content distributors are looking into (documentary programming) in the short term, to fill some of those holes,” said Nason. “Netflix has already done that.”

“If the production halt goes on nine to 12 months, everyone is going to be hurt,” he added. “But compared to some of their competitors… (Netflix) are going to be in much better shape.”

GVS News Desk with input from international agencies and other sources.