Netflix Keeps Making a Huge Mistake (Disney Doesn’t)

The streaming lead could fix its business by borrowing a page from the Mouse House’s playbook.

Netflix (NFLX) – Get Free Report thinks it has a pricing problem. The streaming giant has seen subscriber growth stall and its plan to fix that involves launching cheaper, ad-supported tiers.

The problem is that a standard Netflix subscription costs $14.99 a month. If you watch one movie with another person in the room, you arguably have more than paid back your investment. Add in a series you like or a comedy special and you’re getting an unbelievable value for your entertainment dollar.

A single movie ticket costs an average of $11 and that does not count gas to get there, parking, snacks, or anything else. In theory, Netflix should be able to deliver that much value per person in your household each week.

The problem is that while Netflix makes a lot of movies and television shows, it makes very few good ones. That can be forgiven when it’s a romantic comedy TV series or some other relatively cheap programming that the company is sort of throwing against the wall.

Unfortunately, for both viewers and shareholders, Netflix makes a lot of huge-budget movies starring big (and really expensive) names that are not just awful but also barely make a ripple.

Walt Disney (DIS) – Get Free Report almost never does this.  Nearly every expensive swing it takes comes from the proven Marvel or Star Wars brands. Even a dud like Pixar’s “Strange World” may make its budget back driving people to Disney+ and the company’s biggest recent risk is whether people want to see Harrison Ford reprise his role as Indiana Jones (they probably do).


Netflix Makes a Lot of Movies You Never Hear About 

Screen Rant recently put out a list of the “Worst Netflix Movies of 2022.” As a subscriber, my biggest concern wasn’t that Netflix put out bad movies, but that a lot of these films featured huge stars and I’d never heard of most of them.

These films included some really silly ideas like “Tall Girl 2,” which was apparently a sequel to “Tall Girl,” a movie where the entire premise and plot is in the title. The streamer also had a new version of “Marmaduke,” and apparently yet another sequel to “Texas Chainsaw Massacre.” That’s good news for people who thought the Owen Wilson Marmaduke left unanswered questions and maybe for whoever plays Leatherface, but these films came and went without making a ripple in the public consciousness.

That’s more forgivable than its use of big stars in movies that sank like a stone (three of these four are real):

“Spiderhead,” a sci-fi movie starring Chris Hemsworth and Miles Teller.  “Senior Year,” a coma comedy starring Rebel Wilson as a 37-year-old who goes back to high school.”Death Boat,” an action-adventure film about a ship transporting serial killers to a Guantanamo-like prison starring The Rock and Judi Dench.”The Bubble,” a Judd Apatow comedy about covid, starring Karen Gillan and Fred Armisen.”Me Time,” a sort of buddy/parenting comedy starring Kevin Hart and Mark Wahlberg.

Good for you if you knew that “Death Boat,” was made up, but it’s clearly an idea Netflix would make as long as The Rock said yes.

Netflix Needs to Follow a Premium Model

Giving paydays to mediocre talents or indulging filmmakers by letting them make movies nobody else will finance has kind of been the Netflix model. That might be okay when you’re indulging Martin Scorsese or if you can actually land Dwayne “The Rock” Johnson for a film he cares about, instead of one he makes during the lunch breaks on another film.

Disney, and HBO before it, have shown that people will pay for premium content if it’s actually, you know, premium. At the height of its success, HBO always had only a couple of series in a year that were truly must-see, but those shows are megahits like “Sex and the City,” “The Sopranos,” and “Six Feet Under.”

Even with Disney’s vast content library, Disney+ basically has one major series airing a time. But, the new major Star Wars or Marvel show — even lesser entries like “She Hulk,” and “Andor” are appointment viewing.

Netflix has taken a fame and volume strategy that mixes trying to offer something for everyone with star power. The problem is that very few stars exist that can actually draw an audience to films that aren’t brand names. Chris Hemsworth is a star as “Thor,” not when he’s in anything else and that’s true of pretty much every actor who isn’t Tom Cruise or maybe The Rock.

If Netflix cut its content budget and only made the best ideas it gets presented, it could actually make people care. That’s a much better strategy for subscribers and shareholders than what it has been doing for the past few years.  

If the streaming giants made one really good movie a month and had maybe two hit series airing at any given time, Netflix could double its price and still be a good value.    

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