Netflix one of the biggest movie streaming companies affirmed the fact that it will now have to do more in other to increase its revenue as competition gets harder from the likes of YouTube, TikTok, and gaming platforms.
In affirmation of digital changes, the company acknowledged that it is now competing for consumers with these two platforms, aside from its direct streaming competitors.
Despite the circumstances, Netflix hopes to increase its streaming business’s revenue this year and anticipates a 4% revenue rise for the first quarter of 2023.
In a statement to its shareholders in response to its Q4 2022 financial results, Netflix claimed that because consumers now have so many entertainment options, the industry is more competitive. However, it made clear that in terms of revenue and streaming profit, it is competing from a position of strength.
Big market: Netflix still thinks the market is large enough for it to reach its revenue goals despite the increased competition. It said:
“Beyond our direct streaming competitors, we also vie for consumers’ time against linear TV, YouTube, short-form entertainment like TikTok, and gaming, to name just a few. The silver lining is that the market for entertainment is huge and Netflix is still very small by comparison.
“It’s not easy to build a large and profitable streaming business. But we’re competing from a position of strength, as we lead the industry in terms of engagement, revenue, and streaming profit. As a pure-play streaming company, we’re also not anchored to shrinking legacy business models, like traditional entertainment firms, allowing us to lean hard into the big growth opportunity ahead of us.”
Growth strategy: Netflix announced that it will start implementing “paid sharing” more widely later in Q1 in order to support its income for this year. Late last year, the business introduced compensated sharing, which assures that customers who share their credentials are charged more, although not in all countries.
“So we’ve worked hard to build additional new features that improve the Netflix experience, including the ability for members to review which devices are using their account and to transfer a profile to a new account. As we roll out paid sharing, members in many countries will also have the option to pay extra if they want to share Netflix with people they don’t live with. As is the case today, all members will be able to watch while travelling, whether on a TV or mobile device,” the company stated.