Tom Rogers Reassesses Netflix’s Future Amid Rising Competition
Tom Rogers, a prominent figure in media and former President of NBC Cable, is re-evaluating his previously optimistic stance on Netflix. During an appearance on CNBC’s “Fast Money,” Rogers expressed concerns regarding the streaming giant’s subscriber growth and engagement metrics, attributing some of these challenges to the increasing competition from platforms like YouTube, which offers free content.
Rogers, who had previously identified himself as a “raging bull” on Netflix, noted that while the company continues to produce more hit shows than its competitors combined, the overall engagement from viewers is declining. He stated, “Netflix still has more hit shows than all the other streaming services combined, but when you look at the growth of their subscriber base and look at the amount of total engagement time from all viewers they get, the amount of viewing per viewer has gone down some.”
According to data from Nielsen, Netflix experienced the largest monthly viewership increase compared to its peers in June 2023. Nevertheless, YouTube commanded 13% of total monthly TV viewership, in contrast to Netflix’s 8%. Rogers’ remarks follow Netflix’s positive quarterly earnings report released on July 17, 2023.
“There was nothing wrong with its earnings at all,” Rogers remarked, acknowledging Netflix’s strong financial performance. The company not only exceeded both top- and bottom-line expectations but also raised its full-year guidance. Despite this, Netflix’s stock has seen a decline of approximately 6% since the earnings report, and it is down nearly 11% from its record high reached on June 30, 2023.
Rogers highlighted the significant role of viewer engagement in driving Netflix’s success. “Engagement is what drives everything here,” he said. “The amount of viewing it gets drives price increases, which drive programming budget, which drives more great programming.”
Looking ahead, Rogers predicts that artificial intelligence (AI) will serve as a “double-edged sword” for Netflix. He acknowledges that AI can enhance targeted advertising and reduce programming costs. However, he also points out that it levels the playing field for independent content creators, potentially benefiting platforms like YouTube.
“The line between professional and amateur content is going to get more and more blurry as AI tools in the hands of amateurs allow them to produce things that look incredibly professional,” he explained. “I think AI in the hands of the creative community of YouTube could create a level of professional programming for YouTube which drives its viewership even further.”
Despite his concerns, Rogers maintains that Netflix will continue to hold its position as the most valuable media company globally. However, he cautioned that the potential slowdown in subscriber growth and engagement warrants close attention.
A spokesperson for Netflix, Emily Goldstein, declined to comment further, referring inquiries to the company’s recent earnings call. As the media landscape continues to evolve, Rogers’ insights may provide a valuable perspective on the future trajectory of Netflix and its competitors in the streaming arena.
