Binge-watching has served Netflix (NFLX 4.17%) well for nearly a decade, offering content at any time, at viewers' own pace. But despite Netflix's loyalty to its binge model, newer streamers have used week-to-week episodes to fuel subscriber growth and interest in their content. After losing 200,000 subscribers in the first quarter of 2022 and projecting a loss of another 2 million in Q2, here's why Netflix would do well to abandon binges for weekly releases.
Streaming trends are changing
Streaming juggernaut Netflix introduced its binge model when it released its first major original series, the entire first season of House of Cards, during Super Bowl weekend in 2013. The company has argued that the "all at once" release method prioritizes its customers and is closer to what younger audiences want from their content.
During a Hollywood Radio & TV Society panel on June 7, the company's head of scripted series, Peter Friedlander, revealed that Netflix has no plans to scrap its binge model. Friedlander explained the company wants to continue allowing its members to "watch as much as they want to watch when they watch it."
Disney+ released WandaVision on Jan. 15, 2021, with episodes available weekly until the finale on March 5. The Marvel series ended up 81 times more watched than the average streaming title in January 2021, with viewership figures almost 20% larger than Netflix's biggest series at that time, Bridgerton season one. And WandaVision drew in those audiences even before fans were able to view the entire season.
While Disney (DIS 1.54%) had the immense power of Marvel on its side with WandaVision, a week-to-week model also helped it boost its numbers when it introduced a totally new series, Only Murders in the Building on Hulu. The murder mystery was the 99th most in-demand show in the U.S. a week after it launched in August 2021, but its weekly installments of twisty mystery built word of mouth and drew new viewers. Only Murders climbed to the 19th most in-demand show by Sept. 29.
A June 2021 study revealed that while both the supply and demand of bingeable shows have fallen 23% to 31% since 2017, weekly show supply and demand have risen by 50% to 66%. Streaming platforms once competed against traditional TV, which relied on the week-to-week method, making the option of binge-watching attractive. But streamers are now competing with each other, which means companies need to prioritize subscriber retention.
Weekly releases reduce subscriber churn
Consumer retention is the biggest challenge facing streaming platforms today, with 33% of consumers planning to add a TV subscription within the next six months and 30% planning to drop one in the same timeframe.
Apple (AAPL 0.64%) launched its streaming platform with only a handful of series, each with three episodes available at the start. This method allowed consumers to get hooked before waiting each week for the remaining episodes. From Q2 to Q3 2021, Apple TV+ enjoyed the most quarter-over-quarter subscriber growth than any other streamer when its week-to-week series Ted Lasso and The Morning Show returned for subsequent seasons. The streaming platform's share of the U.S. market grew fivefold, significantly more than any other service; Netflix lost 2% of its market share in the same period.
Between the same quarters, Apple TV+ went from being responsible for 2% of subscriber additions among all streamers in Q2 2021 to 26% in Q3 2021. The immense popularity of its series Ted Lasso and its ability to fuel online conversation for 12 whole weeks helped to boost Apple's streaming growth.
Binge-watching may be better for the consumer, allowing them to choose exactly when they want to view their content and how quickly. However, the collective experience of watching a series week to week helps streamers stay in the cultural consciousness longer.
How Netflix can utilize a week-to-week model
Netflix released seven episodes of Stranger Things season four on May 27, racking up 286.79 million viewing hours in its opening weekend. It's holding back the two final episodes until July 1, requiring fans to retain their subscriptions for at least three months.
Prospective streaming stock investors should watch how Netflix treats its upcoming, highly anticipated series. Shows such as Squid Game season two and Bridgerton season three have the power to draw in new subscribers and retain current ones. Compelling members to open the app at least once a week also lets viewers stumble upon other content on offer.
Additionally, Netflix subscribers have accused the company of being too quick to cancel its series in the past. A week-to-week model would also give new franchises the time to build momentum and a following. If the streaming platform can grow its number of popular content brands and stagger the releases week to week, subscribers will be further encouraged to keep their membership.
