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Will Netflix stop binge releases like Stranger Things? Experts weigh in

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A scene from Netflix’s “Stranger Things”.

Source: Netflix

Could Netflix ditch its binge-release model? Stranger things have happened.

The all-at-once release strategy for television shows is a bedrock of Netflix’s strategy. The primary seven episodes of “Stranger Things,” which all premiered on May 27, broke records. It was the biggest premiere weekend ever for an English-language TV show on the service with nearly 287 million hours watched.

Despite the success of its marquee series, nevertheless, Netflix is struggling to jumpstart subscriber growth. So its binge strategy is facing recent scrutiny as the corporate looks for tactics to raised retain its subscriber base.

“With Netflix, or anyone, never say never,” said Peter Csathy, founder and chairman of advisory firm Creative Media. “Identical to they said ‘no way, no promoting,’ don’t assume that binge viewing is eternally.” He added: “Binge viewing is on the table.”

Investors are questioning Netflix’s ability to handle subscriber losses and growing competition within the streaming space. The streamer’s stock plummeted over the past yr from $700 per share to around $160. The corporate reported a lack of 200,000 global subscribers during its first quarter earnings report in April. It also warned of deepening trouble ahead, forecasting it could lose around 2 million global paid subscribers in the course of the second quarter.

Now, Netflix is reconsidering several core tenets that after made it the king of the nascent streaming world. Co-CEO Reed Hastings said the corporate is exploring lower-priced, ad-supported tiers in a bid to herald recent subscribers after years of resisting advertisements on the platform.

Those accustomed to the streaming space suggest more changes could come, including a stronger deal with franchise content and even a change to staggered releases of recent episodic content.

Netflix has toyed with different release models, mostly resulting from pandemic-related delays in production, and noted that splitting seasons into two parts could be a “satisfying long binge experience” for subscribers. Still, the corporate has made no indication that it should transition away from releasing all episodes of scripted series without delay. As a substitute, decisions can be made on a case-by-case basis.

Netflix declined to comment.

“When Netflix began it really had the sphere to itself,”  said Robert Thompson, a professor at Syracuse University and a popular culture expert. “Considered one of the explanations they began binging was to get people talking and to essentially launch their recent original programming. They succeeded in that. Now, nevertheless, it’s a really different case.”

Netflix not has licensed content like “The Office” or “Friends,” which kept subscribers coming back month after month to observe on repeat. As a substitute, it has several high profile shows, like “Stranger Things,” “Bridgerton” and “The Witcher” — in addition to an expansive library of series that have not reached the identical level of prestige or popularity.

Thompson noted that every one shows released on streaming services eventually change into bingeable. It’s how they’re first introduced to audiences that the platforms control.

To binge or to not binge

“Releasing abruptly, the Netflix model, increases the binge value,” said Nick Cicero, vice chairman of strategy at data analytics company Conviva. “This permits customers to devour at their very own pace, but relies on a deep catalog.”

“The flip side,” he said, “is week over week, which is designed to bring people back and provides them something to look ahead to. It’s a really different model of promoting.”

On services akin to Disney+, HBO Max and Hulu, individual episode releases keep audiences hooked over the course of several weeks, meaning less churn on a month-to-month basis. Meanwhile, Netflix subscribers can watch a full season of a show they’re fascinated by after which leave the service at the top of the month.

On this photo illustration the Netflix logo seen displayed on a smartphone screen, with graphic representation of the stock market within the background.

Sopa Images | Lightrocket | Getty Images

Stringing content all year long allows services like Disney to entice subscribers to remain every month but in addition persuade them to pay for an annual subscription up front. The corporate’s Disney+ platform utilizes its two biggest franchises — Star Wars and Marvel — to maintain subscribers coming back.

The corporate released “The Book of Boba Fett,” which ran from late December 2021 until early February. Then added “Moon Knight” in late March, which ran until early May. Then in late May, it released “Obi-Wan Kenobi,” which can proceed through late June. “Ms. Marvel” arrived early June and can run through late July. August has the discharge of “She-Hulk,” which carries episodes through October, after which “Andor,” which can wrap its first season in November.

Then in December, Disney+ will release the “Guardians of the Galaxy” Christmas special. In staggering these releases, the corporate can entice Star Wars fans and Marvel fans to keep on with the service long run.

“With Netflix, it’s super easy to affix for three-to-six months after which leave for three-to-six months,” said Michael Pachter, analyst at Wedbush. “Once ‘Stranger Things’ is over and ‘Ozark’ is over, what now?”

In recent times, Netflix has experimented with weekly releases for some reality shows, but has not tried this strategy with scripted series.

“We fundamentally imagine that we would like to offer our members the alternative in how they view,” Peter Friedlander, Netflix’s head of scripted series for U.S. and Canada, said earlier this month. “And so giving them that option on these scripted series to observe as much as they need to observe after they watch it, continues to be fundamental to what we would like to supply.”

Netflix has, nevertheless, dabbled in splitting seasons in half or in parts with the intention to spread them out. The fourth and final season of “Ozark” was segmented in two, and so was the newest season of “Stranger Things.” The ultimate two episodes of “Stranger Things” season 4, including its 2.5-hour finale, will start streaming July 1.

“Splitting the seasons actually had a practical reason before, which was the Covid delays and all those projects that sort of led us to splitting a number of the seasons,” co-CEO Ted Sarandos said in the course of the company’s first quarter earnings call in April. “But what we found is that fans sort of like each.”

“So with the ability to split it gives them a very satisfying binge experience for those individuals who want that basically satisfying long binge experience,” he said. “After which with the ability to deliver a follow-up season in a couple of months versus, in some cases, the brand new season of ‘Stranger Things’ is coming nearly three years after the last a number of than two anyway.”

Netflix has long held to its all-at-once model due to its subscribers, which it says want more control over when and the way they watch content. Shows like “Maid,” “Inventing Anna,” “The Lincoln Lawyer” and “Squid Game” all held top 10 spots on the streaming service for weeks, showing that Netflix shows can have longevity of viewing on the service as word of mouth travels to recent audiences.

Still, Netflix can learn loads from staggered releases of “Ozark” and “Stranger Things” to find out whether there are other scripted series that may profit from this strategy.

Pachter suggested that Netflix could take a cue from Amazon and release three episodes every week.

“It’s absolutely OK to say, ‘We’re the disruptor, but there are things our competitors are doing that we admire and we respect them and we predict they’re doing it right,'” Pachter said. “It is not a cop out.”

Franchise fever

Netflix’s all-at-once release strategy may set it other than other streaming services, nevertheless it also signifies that it has to extend it output of content to fill the gaps between series. As a substitute of getting, say, 30 shows spread all year long, it needs 300, Pachter said.

“Netflix’s data dump signifies that they must do more content to attenuate churn,” he said. “I feel that they can be much more successful in the event that they deal with more quality than more quantity.”

For years, the streaming service used licensing agreements with networks and studios to pad its library with long-running and popular series like “Parks and Recreation,” “Schitt’s Creek,” “Mad Men,” and a collection of Marvel-based superhero shows.

Those contracts have ended and the shows are actually on other streamers. In one other blow, Netflix is about to lose 12 seasons of CBS’ “Criminal Minds” at the top of month. “Latest Girl,” one other staple in Netflix’s collection, is anticipated to depart the platform in 2023.

“Breaking Bad,” “Grey’s Anatomy,” “NCIS” and “Supernatural” are sticking around for now.

These sorts of series, which have quite a lot of seasons or dozens of episodes, have been a serious driver of viewing traffic on the streaming service for years. Now, Netflix is more reliant by itself original content, leaning heavily on content creator deals and surprise hits like “Squid Game” and “Love is Blind.”

“Netflix has quite a lot of content, but the enduring evergreen content has not caught as much as the catalogs to the opposite streaming services which can be on the market,” Cicero said.

Relatively recent streamers like Disney and NBCUniversal’s Peacock have a long time of legacy content to fill their libraries with. It’s why Netflix made an agreement to be the primary streaming space for brand spanking new Sony releases back in 2021.

It is also why Creative’s Csathy believes Netflix should deal with developing franchises or buying the rights to already established franchises.

“Relatively than throwing all of the titles against the wall to see what sticks with consumers, deal with franchises and name brands,” Csathy said. “The neatest bets are those who have name recognition and built-in audiences.”

“Wall Street will reward those who come out with a public strategy of less is more,” he added.

Still, there are those who don’t think Netflix can be so quick to overhaul its established strategy.

“I feel people are likely to forget inside our industry is that this is not a one size suits all,” said Dan Rayburn, a media and streaming analyst. “I do not think Netflix will say no more binge watching.”

As a substitute, Rayburn foresees the streaming continuing to try recent models, like its plans for adding an ad-supported plan to its platform.

He noted that the stark stock response is a results of Netflix deriving all of its revenue from streaming. Which means that when a show doesn’t perform well or the service sees a slowdown in subscriber growth, there’s a direct response.

At the top of the day, streaming analysts say content spending is not going to go down, even with ongoing economic pressures, akin to inflation and better rates of interest, and a possible recession on the horizon. Competition within the streaming space will proceed to drive these corporations to create and distribute more content.

“Where the dollars go can be reallocated is the query,” Csathy said. “For Netflix, I feel ‘less is more’ is a technique that pays off for them.”

Disclosure: Comcast is the parent company of NBCUniversal and CNBC.

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