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People stayed home and signed up for Netflix by the millions in March. The company has no idea what comes next.

What Makes Netflix Tick

.. is that it is:

  • An internet-only business model, with no physical goods to deliver, having no interruption due to the lockdown.
  • Not dependent on advertisers, being a subscription-based service.

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People stayed home and signed up for Netflix by the millions in March. The company has no idea what comes next.

People stayed home and signed up for Netflix by the millions in March. The company has no idea what comes next.

https://www.vox.com/recode/2020/4/21/21230397/netflix-pandemic-coronavirus-subscribers-16-million-earnings-tiger-king

vox.com

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Key Ideas

Netflix And Chill In Lockdown

The global crisis of the 2020 Pandemic, resulting in billions in lockdown, has resulted in 16 million people signing up for Netflix in March, taking the total subscribers to 183 million.

This provides consumer companies an important lesson regarding the viability of their products in an economy where 22 million people are suddenly unemployed (in the U.S.) and millions more have a bleak future.

Clueless Companies

Consumer companies around the world are in limbo. They are groping in the dark due to a lot of variables in the current situation.

Many are non-essential businesses, others rely on logistics and physical goods to be delivered. Many businesses are forced to close by the government, due to the social distancing norms, even though the consumers need them.

What Makes Netflix Tick

.. is that it is:

  • An internet-only business model, with no physical goods to deliver, having no interruption due to the lockdown.
  • Not dependent on advertisers, being a subscription-based service.

The New Battlefield

  • Though it is buying fresh content, there are brand-new players in the market with deeper pockets (Apple and Disney) and also Amazon Prime, who are in for the piece of the pie.
  • Netflix may soon run out of new content, and due to the pandemic, production is halted for all movies and series, though it is working on animated content, which is made by animators working from home.
  • The current library for Netflix is huge, and it also has the advantage of a strong recommendation algorithm.

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