Earlier this year, Netflix reported that it lost almost a million subscribers between April and July. That was one tough quarter.
This nosedive could be down to a lot of things. A study from Review.org found that around 40% of people plan on leaving Netflix because of the rising cost of their subscription. 19% say it’s down to inflation and the cost of living. And for 18%, it’s because they use other streaming services more often.
Either way, Netflix is in crisis mode and it’s been insightful to witness how its adapted to this incredibly difficult time for the business.
With reports of a recession, it’s not just Netflix that’s preparing for choppy waters ahead. Here are some lessons we can all learn from the streaming giant’s survival strategy.
Netflix offers a more affordable option
The price of Netflix is undeniably a pain point for a lot of customers. But just as inflation is impacting individuals, it’s also having a massive impact on businesses (those period costumes aren’t going to pay for themselves). Netflix’s prices have to reflect that.
In response to this growing conundrum, Netflix announced a new, more affordable subscription plan that includes ads. That way, customers can access all of the content they know and love for a fraction of the cost, and Netflix can still make a profit from the money they earn from selling ad space.
You don’t have to cut your prices. Instead, you can pivot to a tiered pricing model that suits a number of budgets.
Netflix is going hybrid
In times of financial difficulty, it’s natural for businesses to revise their real estate portfolio. Netflix is reportedly closing its Salt Lake City, Utah office and is subleasing space in its Los Gatos, California HQ. As a result, a larger percentage of the Netflix team are now doing their jobs remotely.
This blend of office and remote work means Netflix can drastically reduce its monthly expenses.
When it comes to future-proofing your business, adaptability is key. And sometimes, huge offices on lengthy contracts can make it difficult to flex around a challenge.
Hybrid working makes it easier to adjust your outgoings to the ever-fluctuating global economy. You can still have an office, but it can be a short-term lease or a network of on-demand workspace.
With Hubble, you can take a flexible full-time office with leases that start from as little as one month. And with the Hubble Pass, you and your team can access over 800 on-demand coworking spaces, private day offices, meeting rooms and event spaces all over the world!
Netflix is cutting costs left, right and centre
In addition to real estate, Netflix is reducing its outgoings across multiple areas in the business. Unfortunately, this meant that hundreds of talented people were made redundant this year.
According to an article in the Wall Street Journal, Netflix is also making a strong effort to control rising cloud-computing costs, it’s asking teams to be more mindful of the software licences they pay for and it’s cutting back on company swag, like free caps, mugs and sweatshirts for employees.
Don’t wait for a crisis to review your operational costs. By regularly revisiting your outgoings on software, storage and yes, even company perks, you could put more money towards an emergency fund for your business.
Netflix leans into its best
Customer retention is a huge priority for Netflix and in order to compete with the likes of Hulu, Disney+ and Amazon Prime, they’ve got to give the people what they want!
Cited by Netflix as their “most popular comedy series of 2020,” Emily in Paris is returning to our screens for season 3, while filming for season 4 is currently underway.
Writers are (almost) leaking spoilers for the fifth and final series of the critically-acclaimed Stranger Things.
And viewers are eagerly anticipating the return of their favourite Bridgerton characters as it’s renewed for seasons 3 and 4.
It can be tempting to chase novelty when it feels like things just aren’t working. But instead of jumping into something new, now’s the time to dive deeper into what is working.
What is your best seller? What if that became your top priority? How can you increase your marketing efforts to sell even more of that product or service?
Netflix tackles its biggest sinkhole
Netflix has over 200 million paying households, but it estimates the service is streamed to over 100 million additional households through shared passwords. Gulp.
In response, Netflix announced a new ‘paid sharing’ model. From now on, there can only be one home per account, but users can add additional homes for a reduced price. This seems like a fair approach to what is, unequivocally, a colossal problem for Netflix.
Where are there opportunities in your business to upsell? Can your customers add a new user for a reduced price, like Netflix and Spotify’s Premium Family plan? Are you giving too much away for free?
By incorporating an upsell strategy to your business, you can earn more recurring revenue from your current customers, instead of spending all of your money and effort on converting new ones.
Netflix reviews its release strategy
Netflix is famous for its binge-watching model. Instead of releasing an episode at a time, they often drop an entire series in one go. This means viewers can spend an entire weekend immersed in their Netflix account.
Even though ‘binge-watching’ has been a key selling point for Netflix (and something the Co-Founders said they’d never stop) it could all change.
There have been whispers in the press about Netflix switching things up—soon, viewers could have to wait a week before they can watch the next episodes of their favourite Netflix series.
Weekly episodes = weekly retention = customers having a reason to stick around.
Be prepared to change.
Stay flexible in uncertain times with Hubble
Just like Netflix, there are many businesses out there who are trying to survive yet another year of uncertainty. But if there’s one thing we’ve learned, it’s that the businesses with the most flexibility are those that come out the other side.
So, if you’re looking to make your business more flexible with hybrid working, we’re here to help you unlock your team’s ability to work from anywhere with the Hubble Pass.
And if you’re interested in taking a full-time flexible space for as little as one month, our team of dedicated Workspace Advisors at Hubble HQ are here to help make your search easy and cost-effective for you.