It made all the early running – but can Netflix keep its place at the head of the SVOD pack?

Irwin Gotlieb doesn’t think so.

The veteran media and technology watcher spent years as global CEO of media agency GroupM.

In this video interview with Beet.TV, he says he foresees “fall-out” from the streaming wars, which sees several new subscription TV operators launching their own services.

“The Netflix model is not long-term sustainable from an economic standpoint,” Gotlieb says.

“Netflix achieved a success because they were the poor man’s HBO and, instead of charging 15 to 20 bucks the way HBO and Showtime were, they charge $7.99 and they hit very high penetration.

“They have begun to plateau, and, in fact some would argue they’re slipping backwards in markets like the United States. They still have massive international growth ahead of them, but only four of the top twenty shows on Netflix are their own. Everything else is off network repeats like ‘The Office’ and ‘Friends’ and so on. And that content is being pulled by … Disney and Comcast who need that content for their own streaming services.

“So Netflix is going to have to spend more and more money to remain competitive in this space at a time when they are getting pushed back on their price structures. And if one were to do a back of the envelope evaluation of Netflix, simply to understand what they have to spend per subscriber to stop haemorrhaging money, you’ll find that that number is probably above the level that the consumer would accept.

So can a consumer fund all the subscription services out there? Unlikely. History has shown that they can’t – and so there will be some fallout from that.”

This video is part of the Beet.TV series title the Road to CES 2020, a preview of the topics expected to be explored in Las Vegas in January.  The series is presented by Samsung Ads.  For more videos please visit this page

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