How can Netflix turn viewers back on?

PRWeek

It started out as a movie-streaming pioneer, but Netflix is experiencing a sharp decline in account holders for the first time in its history. Its share price has also plunged from $373 per share at the start of April to $193 yesterday.

It is blaming everything from the war in Ukraine to people sharing passwords for its 200,000 subscriber dip in the first quarter of 2022, but more alarmingly it sheepishly predicts a loss of two million more users by July, despite gaining over four times that amount in the final quarter of last year.

Though multiple factors are at play, to what extent is this costly predicament Netflix’s own doing? And can savvy PR and comms strategies prevent a further fall?

Threats

On how the streaming giant found itself in this position, Wez Merchant, PR collaborator with fellow streamer Rakuten, founder and CEO of film PR agency Strike Media, says Netflix has been caught in an unfortunate crisis, in which it “hasn’t really put many feet wrong”.

He says economic pressures on households, driven by the rise in “inflation, energy bills and food prices” is putting non-essential spending under scrutiny – and that means relative non-essentials like streaming subscriptions are under threat.

That threat will only intensify in the coming months, says PR specialist Mark Borkowski, as the world prepares for a post-Covid summer of bathing in sunshine after years of being stuck on the sofa. Through no fault of its own, Netflix now has to work harder than ever to keep audiences keen.

One thing the brand can try to control is its public image, which has not been helped by a recent slew of negative headlines.

“They always appear to be taking something from subscribers,” says Dan Neale, managing director of Alfred, a PR agency that has worked with Warner Bros. “Be it favourite shows being cancelled, the risk that you can’t share your login with friends and family, or price increases.”

Neale points out that password sharing was never strictly permitted in the first place, though previous statements from Netflix demonstrate that it wasn’t exactly condemned either.

The streaming giant has also found itself at the forefront of culture wars in the wake of criticism towards jokes made in recent Dave Chappelle and Jimmy Carr comedy specials. Such issues have never seen the platform face as much controversy than at present.

Choice

The poor media narrative surrounding Netflix is not helped by the lessening reliance consumers have on it in an age of overwhelming choice. Though Netflix revolutionised the world of TV and film, it is no longer the only streaming alternative to TV or DVD.

Borkowski says being spoiled for choice makes for “fickle” audiences, while Jason Gallucci, global head of innovation at Media Zoo, says typical streaming subscribers simply are not platform loyal, and will have a “number of streaming sites and will follow quality shows on any or all of them.”

Merchant and Neale agree that despite having a smaller selection of content, some relative newcomers have a stronger audience appeal by targeting more specific groups, conveying much higher quality content even if this may not be entirely the case.

This is certainly true of Disney+, which boasts the entire Marvel and Star Wars catalogues, including regular additions to these franchises. Such high-calibre exclusives generate invaluable earned media.

Similarly, Prime Video’s inclusion in Amazon’s all-encompassing Prime subscription, alongside free next-day delivery, Amazon Music, and Prime Reading, emphasises its value proposition.

Amazon’s streaming platform’s movie library, which recently added the entire James Bond collection, gives it enough of an edge, but when paired with Amazon’s other offerings it gives it an “unfair advantage”, says Borkowski.

Offering the option to ‘rent’ virtually any film not within the Prime catalogue for £5 or less is yet another selling point, providing more versatility and brand new content than Netflix.

To combat this, Netflix “should concentrate on highlighting what is new (or classic) in each genre and hitting the right audience with that information,” says Merchant.

Stuff no-one wants to watch

Netflix does have some wildly successful shows, like Breaking Bad and Stranger Things. With a new season of the latter on the horizon, and the latest instalments of Breaking Bad spinoff Better Call Saul generating buzz for their popularity (and cameos from Walter White and Jesse Pinkman), investment in these shows and storylines will help keep many existing subscribers loyal.

Though as Gallucci points out, there is a “lot of ‘stuff’ on Netflix that frankly, no one wants to watch”.

The recent decline in fan-favourite concept ‘Netflix Originals’ could be seen as perplexing given the quantity of exclusive content being produced, but it could be the case that Netflix is spreading itself too thin, while new programming is simultaneously missing its chance in the limelight. As Brands2Life’s consumer managing director Laura Sibley says: “You can’t promote every show.”

Not helping Netflix’s cause is the platform’s recent decision to disable screenshots, thereby limiting the potential for social media shares. “What was an attempt to protect IP ended up being an own goal for consumer engagement,” says Fever PR’s Jacob Gilles.

“It used to be an industry joke that online users creating memes and content out of screenshots was giving Netflix more publicity than its actual comms team – it turns out there might have been some truth in that.”

Netflix vs TV

An obvious selling point of Netflix over traditional broadcasters has always been its lack of advertisements, but even this is under threat, with the proposition of a cheaper ‘ad-supported’ subscription tier, despite CEO Reed Hastings announcing in 2015 that there was “no advertising coming on to Netflix. Period.”

Netflix changing its stance on this, and password sharing, alters its brand image considerably, although Borkowski believes it is necessary, saying: “They have to be tougher with their audience.”

Why? Borkowski says it’s all down to the figures.

“Success is always governed by the consistency of numbers,” he says. Having made the mistake of getting “carried away by its success story”, Netflix’s sudden halt in growth means it now finds itself unprepared and struggling to “defend the decline in numbers”.

Potentially the most difficult element of decline to defend is Netflix’s share prices plummeting 35 per cent in a single day last week, and 49 per cent during April, a drop that appears to reflect a lack of faith among investors in the business’s existing recovery strategy.

Some may say this is unsurprising given the size of the task at hand.

“If you’re sitting in America now running this, you’re looking at different territories, different media, different arguments and of course the social media upheaval in terms of how many people are using it to be a naysayer about the channel,” says Borkowski.

“Also they have a huge amount of detractors, from other channels, other streamers – it’s a very intense fight. They’re having to deal with subliminal attacks coming their way, and also well-aimed competitors trying to pull the rug from under their feet.”

Recovery

Neale rightly points out that what Netflix is facing is fundamentally “bigger than a comms challenge”. That said, onlookers suggest there are undoubtedly things that Netflix can do to turn viewers back on.

Taylor Herring, MSL and Multitude Media all declined to comment, on account of their work with Netflix.

But Sibley says that Netflix’s comms teams need to build a brand that people can “respect and align with” and “tell the other side of Netflix – more storytelling about the quality programming that they invest in globally”.

Borkowski agrees that bigger gestures could be made, not least within the creative community. “When are they going to give back? It has to be about training, how they bring skill sets into it, and what they’re doing with the fabric of the industry they work within.”

In terms of re-engaging consumers, Sibley believes Netflix needs to remind users of its convenience in everyday life, beyond our usual television-watching habits.

“Travel is going to be pretty important now the world is opening up, and Netflix is the ultimate companion on their journey ahead. On the morning commute, after the kids have gone to bed, when the children need entertainment.

“Netflix doesn’t just provide TV shows. It provides distraction from day-to-day life and entertains the family.” She acknowledges some subscribers “may quibble on the pricing, but for all the value it actually brings to everyday life” it represents value.

“It’ll all come down to the quality of their programming, and the fact that their competition is cash-strapped as well,” says Borkowski. “Particularly with commercial channels in this country seeing a huge drop in advertising.

“I wouldn’t be writing any Netflix obituaries anytime soon.”