In the midst of Disney's recent headlines about spinoffs, sales, and leadership transitions, Netflix's CFO, Spencer Neumann, issued a statement that might have been easily overlooked but carries significant implications for the streaming industry. In a recent article by David Bloom published in TVREV, David discusses how Neumann stressing the need for Netflix to improve every aspect of its service, with a particular emphasis on content quality, acknowledging that this is what their members care about the most, and its implications. Here is David’s analysis and how it affects communicators.

Netflix's strategy revolves around a flywheel model: offering a plethora of high-quality programming to justify price increases, which in turn fund even more content creation. However, criticisms have arisen over the quality of Netflix's shows, especially in light of recent price hikes and tier eliminations. While still a market leader, Netflix's churn rate has been gradually increasing, with only a few shows gaining widespread attention this summer.

The success of Netflix's live-action remake of the Japanese manga and anime hit, One Piece, highlights the strength of Netflix's global content pipeline, especially during pandemic-related production challenges and recent Hollywood strikes. However, Neumann's call for improving content quality raises the question: Why does quality matter when Netflix hasn't always been known for it?

Historically, the TV industry has produced numerous subpar shows, but the landscape is changing. With the rise of streaming services, direct payment models, and ad insertions, consumers expect higher-quality programming when they're paying for it. Neumann's concern is that Netflix's reputation for content quality may not align with the value proposition as prices increase, password sharing is curtailed, and ads are introduced. This challenge is not exclusive to Netflix but affects the entire streaming industry.

In this evolving landscape, there are two distinct markets: one for low-intensity, low-expectation FAST (Free Ad-supported Streaming Television) programming and another for engaging, well-made shows that demand viewers' attention. Netflix, Disney+, Hulu's FX corner, HBO Max, Peacock, and Paramount+ aim to provide the latter. However, even high-quality shows are struggling to retain viewers and secure renewal.

Warner Bros. Discovery CFO Gunnar Wiedenfels emphasized the importance of giving content "oxygen" by reaching viewers across multiple platforms. This notion is critical, as quality content often doesn't achieve its potential without the necessary viewership. Shows like HBO Max's "Winning Time" are seeking more viewership to secure future seasons, highlighting the crucial role that audience numbers play.

In conclusion, the streaming industry faces the challenge of balancing production costs, audience expectations, and scale. Quality content is vital to retain and attract subscribers, especially as prices rise and competition intensifies. Public relations executives in the streaming industry must be aware of these dynamics and emphasize the importance of delivering high-quality programming to maintain their competitive edge and meet the evolving demands of their audience.