The first quarter of 2022 brought a loss of 200,000 subscribers for Netflix (NFLX 0.83%), prompting the media to question the company's position in the streaming wars. Despite a disappointing first quarter, the popularity of Netflix's recent releases proves the streamer's content is more than capable of competing with other platforms. Here's why Netflix can beat out the competition with its content.
Content with power
Netflix released the first seven episodes of Stranger Things, Season 4, on May 27. The show accumulated 286.79 million viewing hours in its first week, breaking the streamer's record for the biggest premiere ever. The new season featured a Kate Bush song titled "Running Up That Hill," which climbed to No. 5 on the U.S. Billboard Hot 100 chart and No. 1 in the U.K. -- 37 years after it was released.
The overwhelming popularity of Stranger Things has seen Netflix create a franchise that has deeply permeated pop culture. And yet, this is by no means a one-off event. The second season of Bridgerton, which premiered only two months earlier on March 25, held Netflix's previous record for the biggest release weekend. Additionally, Stranger Things has now become the third title ever to break five billion weekly viewing minutes -- reaching 5.1 billion -- after Tiger King with 5.3 billion and Ozark with 5.2 billion, all of which are Netflix originals.
The hit series Squid Game continues to hold the record for the most popular Netflix series of all time, racking up 1.65 billion viewing hours in its first 28 days.
Netflix's immense success with its releases has seen the streaming giant regularly break records as the new seasons of Stranger Things, Bridgerton, and Squid Game were all released within the last nine months. Developing its first original series in 2013 with House of Cards, the company continues to develop hard-hitting content almost a decade later.
NASDAQ: NFLX
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A leader in creating new TV franchises
Netflix has consistently stood out among the competition by creating new intellectual properties (IP) for TV that quickly gain a large following. Stranger Things, Ozark, Bridgerton, Squid Game, The Crown, The Witcher, and Emily in Paris are just some of the franchises Netflix has built up from completely original ideas or never-before-adapted content.
Alternatively, Disney (DIS +0.81%) has had success on its streaming platform, with the help of major brands such as Star Wars and Marvel. The first episode of the highly anticipated series Obi-Wan-Kenobi on Disney+ premiered on May 27, the same day as season four of Stranger Things. The Star Wars series prompted the largest premier weekend for an original series on Disney+ and was the third time a series on the platform had exceeded one billion viewing minutes on an opening weekend. The Marvel series Loki did so twice. However, the first episode of Obi-wan Kenobi pulled in an average of 11.2 million viewers, while the first episode of Stranger Things, Season 4, attracted 12.7 million.
Disney+ will only go so far by leaning heavily on popular IPs such as Star Wars and Marvel for its top series. These franchises work within specific genres and don't provide enough variety to satisfy all subscribers. Netflix's most successful series of the previous year span multiple genres and languages, including science-fiction horror Stranger Things, historical romance Bridgerton, and Korean survival drama Squid Game.
Although other platforms, such as HBO Max, have had success with original content, they don't have as many recent and popular series as Netflix. HBO Max's top series of 2022 so far has been the original series Euphoria. The Zendaya-led series has become the second-most-watched show for HBO, behind Game of Thrones. Its second season premiered in January and accumulated an average of 16.3 million viewing hours an episode the month it was released and about 130 million hours for the whole season.
However, HBO Max has leaned heavily on older titles and classic franchises to create value for its subscribers. Some of the streamer's most viewed series include South Park and Friends, which HBO's parent company AT&T does not directly own. Even its newer and upcoming series -- such as the Sex and the City reboot, And Just Like That; or Game of Thrones spin-offs House of the Dragon and the newly announced Jon Snow series -- rely on content that was popular before the introduction of HBO Max.
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Looking to the future
If Netflix can continue developing original content that creates a significant reaction from fans, subscribers will see more value in their subscriptions. Keen investors should look out for Netflix's subsequent releases and viewership for the best indications that the platform is continuing to break records and satisfy viewers. It's also a good idea to check out what other streamers are doing in terms of original content. The situation could change if Disney+ can reach the heights of Stranger Things with a new and original title.
