Netflix is one of the most successful online streaming services, which kick started a whole new television and movie platform. With the company announcing a recent drop in shares, as well strong competition rising from competitors. Retail Gazette looks at whether Netflix‘s success is slowly coming to a stand still?
Netflix was founded in 1997 and is currently the leading internet television network. It has subscribers in over 50 countries and offers more than two billion hours of television and movies per month. Netflix subscribers have no limit to what they view, with the added luxury of watching TV without any commercials. Customers can also play, pause and resume shows as they please. Users can access Netflix anytime, anywhere on pretty much any internet connected device.
The video streaming service shares have plummeted over 25%. This has left Netflix investors disappointed as the companies growth is significantly below what they had forecasted. Netflix gained around 3 million new customers worldwide but had previously predicted they would receive 3.7 million new customers. This leaves the company with a total of 53.06 million subscribers. The primary cause of the downfall could be due to the increase in prices compared to the prices they offered to customers a year ago.
The drop in shares could have a seriously damaging effect and possibly result in the company losing around £4.24bn from their market valuation.
This development also comes at the same time that HBO announced they are launching a stand alone streaming service in the US. The American premium satellite network is home to acclaimed shows such as The Sopranos and Girls. The online video streaming service will be introduced in 2015, customers will not be required to have a television subscription to enjoy an array of shows.
The HBO service is targeting the 10 million US residents that subscribe to broadband but do not watch television. There are 80 million US homes that do not have HBO and the network is looking into new ways to dominate people‘s living rooms.
Not all video streaming sites enjoy success. With the excitement surrounding Netflix many companies are quick to jump on the back of the trend and try and compete with the new internet television platform. Tesco has recently announced their plan to sell or even shut down their online movie service Blinkbox. The supermarket bought Blinkbox back in 2011.
On the more traditional spectrum of television and entertainment services, HMV also known as His Masters Voice has enjoyed a recent success in sales. This comes as positive news after the store collapsed into administration in 2013. The music and movie retailer struggled to compete with the prices and convenience offered by supermarkets, online retailer Amazon and video streaming services. Netflix‘s offers easy access to hundreds of television shows and movies without having to leave your front door.
HMV may have previously been a mainstream high-street store but is now the underdog of the group. The highly anticipated Christmas season will potentially decide whether the underdog triumphs or whether Netflix overcome their difficulties and continue to dominate the online streaming industry.