Why You Might End Up Cancelling Netflix If They Make This 1 Move
They start selling your data.
Key Point: Will this turn their fans off?
Even in the wake of a recent mixed earning report and volatile stock prices, Netflix remains the media success story of the decade. The company, whose user base has grown rapidly, now boasts almost 150 million global subscribers.
But as someone who studies the television industry, I’ve always wondered how Netflix can provide so much unlimited ad-free content for such a low monthly rate, which currently averages around US$14.
After all, didn’t MoviePass just fall apart using a similar model of offering ad-free content for a monthly subscription fee? And Netflix is burning through cash, with negative cash flow of $3 billion in 2018 alone.
What if we’re looking at Netflix through the wrong lens? What if its primary long-term business model is not as a media content or distribution company, but as a data aggregation company?
Seeing Netflix this way might better explain its current strategy and clue us into the company’s future plans, while raising red flags about ethics and privacy.
Spending more and charging less
For a century of screen entertainment, there were only a few ways for Americans to pay for media:
You could purchase a book, album or DVD, “lease” a movie theater seat or rent a tape at a video store;
You could pay with your attention by consuming ads alongside “free” radio or television programming;
Or you could subscribe to cable TV, and pay a large monthly fee to access an array of scheduled programming.
Netflix doesn’t follow any of these three models. Instead it most resembles HBO’s subscription service, which similarly provides ad-free original programming alongside a library of older content for a monthly fee.
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