Will Netflix Face a Downfall in the Next 2 Years?

After a prolonged reign, the king of streaming, Netflix is going to battle hard to maintain its position. The cost-of-living problem is projected to have an impact on UK subscribers in 2023, and it will take time for Netflix's inexpensive, ad-supported plan to gain popularity with customers.

Image by Andrés Rodríguez from Pixabay

The biggest streaming service in the world is forecast to lose 200,000 users this year. The total of 500,000 users had already stopped using Netflix to cut their expenses. According to Ampere Analysis, the company's user based in Great Britain will drop from 14.2 million to 13.7 million this year. The company has reduced staff and tightened its control with a $17 billion annual content budget after documenting its first worldwide registered users decline earlier this year.

According to the Director of Ampere Analysis, Richard states,

I don't foresee Netflix to resume growing in 2023 given the broader economic challenges the UK is now experiencing. Our entire idea is that Netflix will return to growth when the UK economy does, which is most likely around 2024. End of 2021 will see the launch of the streaming service's ad-supported subscription plan for £4.99 per month, saving users £2 per month. Prior to that, the prices had increased for the second time in 18 months. The service is home to hit series like "Stranger Things," "Orange is the New Black," and "Black Mirror" as well as more than 4,000 movies and almost 2,000 television shows

According to Ampere, the marketing strategy would ultimately pay off for Netflix by increasing members by 4% in the year 2027. 255 million global customers from 246 million — than would have been possible if the company had continued with its old approach. If Netflix hadn't introduced its new ad tier, forecasts indicate that its income would have reached $40 billion globally in 2027. Instead, the industry might predict overall sales of $43 billion, with subscription income declining to $36 billion but rapidly increasing to $7 billion in 2027.

According to Broughton, it is challenging for a company of the size that Netflix has evolved in many areas to expand. "This year, the price has reached a maximum. There is a lot of backlash today when Netflix raises subscription pricing.

Rival Amazon's Prime Video saw its UK subscriber base increase from just over 12 million to 12.3 million accounts in 2022. All thanks to the release of Lord of the Rings spin-off The Rings of Power, the world's most expensive TV show. The first season was ever made with the budget of $465 million.

The only large service to continue to gain pace is Disney+. It is the newest streaming powerhouse, which began in the UK in early 2020. This year, Disney+ will record market-leading growth of 1.4 million members, bringing its UK base to 6 million.

Although it’s not a great news for Netflix. It is backed by shifting economic forces, and fierce competition from other streaming platforms.

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