Netflix is Done? Ok Boomer.
Netflix’s winning strategy for Gen Z engagement
When Netflix’s stock market shares dipped by 11% at the end of April, reporters and market speculators spent a lot of time thinking about what that meant for the Streaming Giant's future. There was hand-wringing everywhere that perhaps now was the moment when we would see an Era of Disney+ supremacy. (Disney surely is thinking it, given this bold box at the top of a Google Search for Netflix.)
Maybe, Netflix was finally overtaken by its competition– HBOMax had been around for less than a year and had walloped Netflix in new subscribers in Q1– nabbing 2.8 million in the US, compared to just 450,000 for Netflix during the same period.
Additionally, over the course of the past two years and peaking into the beginning of this year, consumers were decrying “Netflix Sucks” and looking for alternatives. As we were all glued to our devices, televisions, and computer screens, it became increasingly clear that Netflix didn’t have a whole lot of interesting stuff to watch — its offering and interface was as bloated as the Cable subscription I find myself navigating at my father’s house each time I visit.
Netflix had lost a little bit of its shine. It was a platform with low-quality content and a user interface that encouraged you to watch the same sitcom for the 10th time (in my case, I’ve watched all 6 seasons of New Girl 3x this past year). But that is all starting to change.
While it seems like exciting content is what can make or break a streaming platform or service, what really sets offerings apart is how they function as a place of discovery.
The pandemic has made us hunger for the joy of discovery more than ever before. It’s a big reason why TikTok became the most popular social media platform of the past year. The FYP (For You Page) is a case study on how to use algorithms that monitor our likes, dislikes, interests, and desires to curate a content experience that seems like it’s plugging straight into the depths of our cerebral cortex.
Discovery is the cultural cachet of young people. 72% of Gen Z says that discovery brings happiness and joy — it’s what connects young people to new ideas, hobbies, and cultures. It’s not that over the past few years Netflix had become bloated with content, it’s that it had become bloated with content that no one could navigate. Enter Play Something.
Netflix was born back when Blockbuster reigned supreme — they were founded in late August 1997 — and like any good Virgo, Netflix is leveraging their nearly 24 years of algorithmic knowledge of their consumers to stay ahead of competitors. Play Something aims to help users overcome decision fatigue when faced with too much content, and at the same time infuses that joy of discovery into a habit that’s become humdrum in people’s lives.
Through multiple access points in the user interface, Play Something will select content at random for viewers to watch that Netflix thinks they’ll like, whether that’s something new, something in a genre they gravitate towards, or a show or movie that is in the depths of the “I’ll watch this at some point” queue. It’s bringing in what users have grown accustomed to from platforms like YouTube and TikTok in terms of discovery — and you’ll likely never hear young people say that those places have too much boring content (and they’re just as bloated, if not more so than a place like Netflix). It’s too early to tell if Play Something will be able to deliver on discovery, but as long as consumers can receive a steady diet of what they want (whether it’s highbrow or lowbrow doesn’t matter), they’ll stay. Netflix’s broad knowledge of our tastes, and what we’re talking about on Twitter, will mean that they’re always going to be the one to be able to deliver that highly customized experience for the viewer in a way that it truly doesn’t matter if you can watch In The Heights on HBOMax this summer.
But, since I brought it up, let’s talk about Netflix’s content problem. What we’ve been experiencing as consumers have been the in-real-time growing pains of going from being exclusively a content distributor to becoming a content producer with a distribution network.
The future of original content: from ‘diversity’ and tokenization to actual inclusion
At the beginning of this year, Netflix announced that it would no longer need to borrow money to build out its original content. In less than a decade, the streaming service transitioned from relying heavily on the intellectual property of others to being a formidable force in Hollywood. There were casualties along the way (RIP One Day at A Time), but Netflix is taking what they’ve learned to gain critical and cultural success. At this year’s Oscars, Netflix won 7 Academy Awards including their second for Best Documentary. They beat out every other major studio in the running (although they did miss out on nabbing any of the Big 4 — Best Actor, Best Actress, Best Director, and Best Film).
We’re just at the beginning of seeing what Netflix can achieve in terms of their original content now that they have the financial green light to have creative freedom. Some have argued that Netflix is working too hard at making sure that their content offerings have something for everyone, and in turn, their programming doesn’t really land with anyone. But Netflix understands what their consumers — especially younger audiences — want: diverse and authentic storytelling from beyond their bubble.
Technology has radically changed how Gen Z views and connects with the world around them. They don’t distinguish between online and IRL friends, and often dialogue about the way different causes and issues they care about intersect with and impact different identities and communities. They listen to more music from different countries than other generations, and 40% of them identify as global citizens. We’ve seen the implications of this behavior in the boom of K-Pop and Urbano Latino music globally, in the interconnected network of youth climate change activists worldwide, and in the global protests for Black Lives and other marginalized groups. Thanks to streaming television, young people no longer need to find an art-house cinema to watch a hit international film, and the global community can more easily share their stories with American audiences. This global perspective would of course catch up to what we watch, and Netflix understands this in a way that other content producers (and perhaps even their critics) haven’t quite caught up to yet.
At the beginning of 2021, Netflix’s most-watched TV show, was a French mystery heist, Lupin, a story about a loveable and charming thief, Assane Diop, who seeks to avenge the wrongful imprisonment and death of his father by a rich media tycoon. Layered into that, is a story that tackles xenophobia, racism, immigration, and the wealth gap in France. At the end of last year, everyone was openly thirsting over Regé-Jean Page as the Duke of Hastings in Bridgerton, an escapist Regency-era romance that recalibrates the idea that Black people didn’t exist in the past. A USC Annenberg report released in February of this year revealed that Netflix is an entertainment industry leader in representation across the racial and gender spectrum — both in terms of who is on-screen, and creatives behind the camera. To the end of continuing to deliver (and improve!) on this diverse and inclusive content, Netflix has committed to investing over $100 million over the next five years to create a pipeline of talent from underrepresented communities globally.
Netflix has learned from the pitfalls of actions by places like TikTok and Instagram–where content often created by underrepresented communities gets hidden, shadow-banned, or appropriated, and instead of making excuses, Netflix has stepped up to actively showcase and invest in their stories, and now, hopefully, with the addition of Play Something, help people discover it.
This year, Netflix has a $17 billion budget to spend on original content, and we can expect that the larger investments of that budget will continue to be in creating buzzy original international non-English content as well as courting prestigious showrunners, producers, and influential figures with lucrative deals that provide them with artistic freedom that will continue to cement Netflix’s credibility amongst artists and culture creators, who, let’s face it, are often people from underrepresented communities. Netflix is even in the early stages of building a team that will grow its gaming and interactive content offerings. So perhaps we can expect over the next few years for Netflix to deepen their engagement with their Gen Z audience (Nearly 80% of people in the US ages 13 and up consider themselves gamers, and spend up to one hour per day gaming).
Although other streaming services are catching up to Netflix (Disney+ is on track to outpace Netflix in subscribers by 2024), they’re still in their infancy of providing audiences — and especially young people — two key elements: a mechanism of content discovery that engenders joy and surprise, and active investment in stories that de-center whiteness and American culture. Hopefully, other platforms will follow suit... and maybe then we’ll really see competition heat up.
