American OTT content platform and production company Netflix has released official data which reveals a large dip in its second-quarter revenues for 2021. The standard streaming platform which has seen immense growth during the past 3-4 years has taken a major hit in revenue generation for this Quarter (April-June).
The OTT platform based out of Los Gatos, California has put up numbers that equate to its lowest subscriber growth since the company’s inception. Netflix recorded 1.5 million new subscriptions in the past three months, which is way below its standard growth. Part of the reason for this downfall is the ongoing pandemic because of which its production activities have been halted. Also, other streaming platforms have capitalized on the opportunity and come up with exclusive content.
As per sources, the company expects to add around 3.5 million subscribers in the next three months. This number was earlier expected to be around the 6 million marks. This quarterly downfall has led to its shares getting affected adversely as well.
Therefore, to revamp its content creation and lost revenue, Netflix is looking to identify new sources of income. The people at Netflix have concluded that they need to try their luck in the gaming industry as well. They plan to produce video games next year and target gamers, in an attempt to gain more subscribers and generate higher revenues.
Informing its shareholders about the new venture plans, Netflix wrote an official letter to them which said, “We view gaming as another new content category for us, similar to our expansion into original films, animation, and unscripted TV.”
The company added that games would be included in members’ subscriptions at no extra cost and that it would initially focus on mobile games. It plans to publish its first games in 2022.
Although Netflix made public their decision to add a gaming category to their subscription, they have brushed away any plans of streaming live sports, at least for the next year or so. There were wide speculations about Netflix aiming to ply their trade in live sports streaming like their competitors Disney+ and Amazon.
Netflix CEO, Ted Sorandos, in an official media release addressed the above point and said, “Our fundamental product is on-demand and ad-free, and sports tend to be live and packed with advertising. When [live sports] becomes the best use of that next tranche of investment, we definitely would be open to it.”
This media release comes a few months after Amazon and Disney+ live sports streaming deals respectively. Earlier in March, Amazon bagged its first exclusive NFL deal. As part of the deal, Amazon has the rights to stream ‘Thursday Night Football’ on Prime Video for $10 billion over 10 seasons. They also have select rights for the Premier League in England.
Whereas Disney+ in May renewed their deal with MLB (Major League Baseball) and also signed a ground-breaking agreement with Spain’s La Liga for 8 seasons worth a staggering $1.4 billion. Before this, Disney India also acquired Star India’s video streaming app Hotstar. In India, this meant the merger of the entertainment network under Star India, including the sports network Star Sports, and the OTT service Hotstar.
Thus, Netflix not entirely ready to enter the live sports market comes as a surprise, but it feels only a matter of time before they do so, if they have to compete with these powerhouses.