Netflix is one of the most successful content companies in history. It has hundreds of millions of subscribers, billions in revenue, and one of the most sophisticated content operations in the world.
And yet, its stock price has fallen roughly 40% over the past year. The company just announced plans to lay off approximately 1,000 employees and replace its chief content officer, Bela Bajaria, with former Disney executive Peter Rice.
In announcing the leadership change, Netflix co-CEO Ted Sarandos said the company would "continue to scale and deliver members more of the stories they love."
But there's a troubling sign: According to the Los Angeles Times, Netflix's five biggest English-language scripted movie releases this summer attracted fewer average viewing hours during their first eight weeks than the comparable top five releases in each of the previous three years.
In other words, Netflix is committed to battling it out for people's attention, even as their content is producing diminishing returns.
The Content Arms Race
Netflix spends billions of dollars producing and acquiring movies and television shows. But it's competing against Disney, Amazon, YouTube, TikTok, and countless other sources of entertainment.
Everybody is fighting for the same limited supply of attention.
That's the Content Arms Race: Everybody pumping out more better content in an attempt to capture attention, and in the process, dividing that attention even further. And the competition is every bit as brutal as the Squid Games.
Netflix can spend billions of dollars trying to win that race. You can't.
Yet you're competing for attention in the same crowded marketplace. Every time Netflix, YouTube, or TikTok finds another way to keep people watching, that's attention your content has to compete for.
What If Being Smaller Is Your Advantage?
The Content Arms Race isn't the only way to build a business. Instead of relying entirely on content to generate revenue, you can bring people together and create opportunities for them to find value in their relationships with one another.
That's Community Revenue.
Netflix has an enormous advantage when it comes to producing content. But when it comes to building community, its size may actually work against it.
Netflix needs to attract millions of viewers to justify its investments. You might only need a few hundred people who share a common purpose.
And unlike Netflix viewers, those people can create value for one another. They can exchange knowledge, offer support, collaborate, and build relationships that give them reasons to participate and keep coming back.
Those relationships can also create opportunities to generate revenue that don't depend entirely on producing your next piece of content.
You can't beat Netflix at its own game. It's not clear that Netflix can beat Netflix at its own game. But you don't have to play the same game.
What's Your Community Revenue Strategy?
You may already have people in your audience who want more than another video, podcast episode, or newsletter. They may want to connect with others who share their interests and goals.
But how do you know if they're ready?
Take the free Community Revenue Scorecard to find out whether your audience is showing signs that it's ready for a community.
See If Your Audience Is Showing The Signs
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