What Would Happen if Netflix Went Out of Business?
Disney+ debuted to much fanfare this month, and despite some technical glitches, some people have wondered if the new streaming service could be a “Netflix killer,” what with Disney dominating the entertainment landscape the way it does.
The short answer is no, Disney+ is not going to kill Netflix. The streaming giant knew only too well Disney+ was coming, so they have been spending billions of dollars on content.
However, Blockbuster thought Netflix wasn’t much of a threat at first, and Blockbuster today is a shell of what it once was, with only two stores left.
So just for the sake of argument, it’s worth wondering what would happen if Netflix did go under.
Netflix has shown cracks in its armor
While Netflix didn’t invent streaming, just as Apple didn’t invent the smartphone, the company and the product have become synonymous with one another. Ever since Netflix morphed from a DVD rental by mail company to a streaming outlet around 2007, Netflix has dominated that market despite competition from Hulu and Amazon. Not for nothing are there buttons dedicated to Netflix on remote controls.
Despite that dominance, according to The Verge, Netflix has shown signs of weakening this year. This summer the company reported its first major subscriber losses, with less than expected growth. That forecast could not have come at a worse time, with HBO Max and Universal’s Peacock preparing to launch.
That’s why Netflix is looking at growing its presence in international markets like India, where streaming hasn’t yet saturated the market. Netflix also continues to increase content spending. In 2015 they spent $1 billion, and that amount has nearly quadrupled this year.
Netflix is only increasing strength as an Oscar player, with its Martin Scorsese movie The Irishman being touted as a possible Best Picture winner. And that cost $140 million all by itself.
What would happen to Netflix’s content?
If worse came to worse and Netflix had to close up shop, then the content that Netflix plays but does not produce, such as Mad Men or Ken Burns’ The Civil War, would obviously go to other streaming platforms. Much ado was made earlier this year when it was announced two of the most-watched shows on Netflix, Friends and The Office, would be leaving the platform.
Friends would go to HBO Max next year, while The Office would go to Peacock, Universal’s streaming service, which is still being developed.
But what about shows produced by Netflix, such as Stranger Things and House of Cards, the latter of which was the show that helped start the binge-watching craze? That’s much murkier.
One user on Reddit said, “Content catalogs have been bought and sold in entertainment for a hundred years. There are entire companies that have a business of just buying up catalogs, let alone players in the market. Companies used to regularly buy the content libraries of failed entertainment companies, as those companies liquidated assets.”
For example, although Circuit City filed for bankruptcy and closed its brick and mortar stores, the company’s assets were purchased and it still operates as an online electronics store.
Metro Goldwyn Mayer hasn’t functioned as a full-fledged studio since the 1980s, but Warner Bros. got control of their classic films library, which is why, for example, a Wizard of Oz DVD has a WB logo on it.
Netflix still isn’t going anywhere soon
Although Netflix has undoubtedly taken some hits while Disney+ and Apple TV+ have stormed on the scene, the reality is that even if Netflix were going to go under, it wouldn’t happen for a long time. Netflix might be a company that is “too big to fail.”
As Marketwatch points out, “There is no evidence that another streaming service will dethrone Netflix as those broadband services are built out. Disney+, the streaming service set to launch in November, may be a viable global competitor. However, Netflix is still projected to be in first place by a wide margin by 2024.
After 2024, though, who knows? Many people have pointed out that once all the costs of the streaming services add up, the amount has begun to approach the cost of a standard cable or satellite bill.
Streaming is still in its infancy, and to say the least, it will be very interesting to see how it matures.