Netflix is ​​counting on the death of TV channels to boost its growth

Netflix prophesies the death of TV channels within 5 to 10 years. The VOD service ensures that the disappearance of linear TV will allow it to relaunch the growth of its subscriber base, which has been eroding for several months.

This Wednesday, July 20, 2022, Netflix lifted the veil on its financial results for the second quarter of the year. The VOD leader is still in bad shape. Indeed, Netflix has lost 970,000 subscribers during the period.

During the previous quarter, more than 200,000 customers had already canceled their Netflix subscription. Despite the return of Stranger Things, the flagship series of the catalog, Netflix has not managed to stem the exodus of its users. Nevertheless, the American platform still has 220.67 million subscribers worldwide.

Unsurprisingly, Netflix suffers from the emergence of competition, like Disney+, whose subscriber base is growing at high speed. As Netflix continues to lose viewers, Disney’s platform passed the milestone of 137 million customers worldwide, up 7.9 million in three months.

Also read: Netflix represents a staggering share of Internet traffic in France

Netflix prophesies the imminent extinction of linear TV

Netflix’s sluggish results caused stock market crash of the company. After last year’s highs, the stock fell sharply around $200. As of this writing, the stock is worth $216. In 2021, it briefly passed the $600 threshold.

In this context, Reed Hastings, CEO and co-founder of Netflix, tries to reassure shareholders. During his last call to investors, the leader hinted that traditional television will bow out in five to ten years.

According to Reed Hastings, the death of tv channels will help relaunch Netflix’s growth. The CEO believes that fans of linear TV will gradually turn to streaming platforms. This pool of potential customers would come to market in the coming decade.

In other words, he admits that it could take several years for Netflix to register a further increase in its customer base. The VOD number 1 seems to have won over as many streaming enthusiasts as possible. To relaunch, Netflix will have to address the users of its biggest competitors, television channels such as TF1, France 2, Cartoon Network or even BFM TV.

Is traditional television doomed?

Despite Reed Hastings’ assertions, linear television is not yet dead. In France, many viewers find themselves in front of the small screen to follow variety shows, sports events, political debates or reality TV programmes. These programs are still poorly represented on VOD services.

Nevertheless, the audience figures of Mediametry show that the French are increasingly turning away from TV channels. Since the beginning of the 2000s, the channels’ audience has eroded considerably. The youngest seem to prefer services accessible on the Internet, such as YouTube or Netflix, to linear television.

In 2021, children between the ages of 4 and 14 spent on average one hour and 10 minutes in front of TV channels, down 18 minutes compared to 2019. Note that children spent 2h18 per day in front of television in 2011. Growing up, the youngest could precipitate the abandonment, or at least the obsolescence, of television channels. Deprived of viewers, channels financed by advertising risk having to reinvent themselves.

Netflix is ​​inspired by TV channels

While impatiently awaiting the death of TV channels, Netflix began to tread on their toes. The streaming giant is testing a feature called Direct in France. This option, which has been tested since the end of 2020 in France, allows you to watch programs broadcast continuously. On the web version of Netflix, certain content appreciated by Internet users is broadcast live, like a traditional TV channel.

While waiting for the death of TV, Netflix has implemented several measures to garner new subscribers. The American service notably announced the arrival ofa cheaper ad-supported offer. However, this subscription will not allow you to watch all the series and films available in the Netflix catalog. Will this approach allow the company to hold out until it abandons linear TV?

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