Tom Rogers, a prominent figure in the media industry and former NBC Cable President, has expressed growing concerns about Netflix’s future. Once a staunch advocate for the streaming giant, Rogers remarked on CNBC’s “Fast Money” that he is beginning to see challenges, particularly from the increasing competition posed by free content platforms like YouTube.
Rogers highlighted the paradox of Netflix’s situation, noting that while the platform continues to produce more hit shows than its competitors combined, subscriber growth and viewer engagement have shown signs of decline. 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 the amount of total engagement time, viewing per viewer has gone down some.” His role as executive chairman of AI company Claigrid informs his perspective on the changing landscape.
Recent data from Nielsen indicates that Netflix achieved the highest monthly viewership increase among streaming services in June, with a notable performance during its quarterly earnings report on July 17, 2023. Despite beating both top and bottom-line estimates and raising its full-year guidance, the company’s stock has declined by approximately 6% since the report, and it is down nearly 11% from a record high reached on June 30, 2023.
Rogers pointed out that while Netflix’s earnings were robust, “engagement is what drives everything here.” He explained that viewer engagement influences pricing strategies, which in turn affects programming budgets, ultimately determining the quality and quantity of content produced.
The competitive landscape is shifting rapidly, particularly with the rise of platforms like YouTube, which accounted for 13% of total monthly TV viewership, compared to Netflix’s 8%. This shift in viewer preferences could pose serious challenges for Netflix as it strives to maintain its leadership in the streaming market.
Looking ahead, Rogers sees artificial intelligence as a “double-edged sword” for Netflix. While it could enhance targeted advertising and reduce programming costs, it also empowers independent content creators. He noted, “The line between professional and amateur content is going to get more and more blurry as AI tools allow amateurs to produce content that looks incredibly professional.” This development could further bolster YouTube’s viewership, as creators leverage AI to enhance their content quality.
Despite his concerns, Rogers maintains that Netflix will likely retain its status as the most valuable media company globally. However, he cautioned that the current lag in engagement metrics is something to monitor closely.
Netflix spokesperson Emily Goldstein declined to comment further, deferring to the company’s quarterly earnings call for additional insights. As the streaming wars continue to evolve, the ability to adapt to changing viewer habits and technological advancements will be pivotal for Netflix’s sustained success.
