What’s the secret to its continuing popularity and profitability?
Do you know what “first-mover advantage” means? No, it’s not like a “3 Body Problem.” Come to think of it, though, the two are not wholly unrelated. First-mover advantage is what Netflix has long (and very lucratively) enjoyed over its competitors; and it’s the streaming service on which “3 Body Problem” is currently available.
First-mover advantage is a term marketers use. When a company introduces a product or service before anyone else it can establish itself as dominant in that particular market. Things don’t always work out that way. Netflix wasn’t the first streaming service. It started the switch from mailing DVDs to offering video on demand in 2007. A Hong Kongbased company called iTV preceded that by a decade, but the concept didn’t take. The evil twin of first-mover advantage is premature-mover disadvantage. Netflix’s timing was right, as iTV’s was not.
If you doubt just how advantageous Netflix’s firstmover status is, look at current streaming-service subscriber numbers, along with the year each service began.
Netflix, 2007, 269.6 million subscribers
Amazon Prime, 2011, 230 million subscribers Disney+, 2019, 150.2 million subscribers
Max, 2020, 97.7 million subscribers Paramount+(as CBS All Access), 2014,
67.5 million subscribers
Hulu, 2007, 48.5 million subscribers
Peacock, 2020, 34 million subscribers
Apple TV+, 2019, 25 million subscribers (estimate)
But wait, Hulu started the same year as Netflix. So it did, but in October not January, and without the pre-existing brand loyalty, and cultural visibility, that Netflix had developed with its DVD service. Brand loyalty and prominence are important factors, too, as the runner-up status of Prime Video and Disney+ attest.
Total subscriber numbers aren’t the only metric for success. “Maturity” is the downside of first-mover advantage, yet Netflix added 9.3 million subscribers in the last quarter. It also had $2.3 billion in net income. In contrast, Max, Disney+, Paramount+, and Peacock all had eight- or nine-figure losses in their owners’ most recent quarterly reports. (Apple doesn’t break out figures for Apple TV+, hence the subscriber number being an estimate; and streaming is only one benefit of an Amazon Prime membership.) First-mover advantage is at its best when it contributes biggest-profits advantage.