An Experimental Time for the Streaming Supreme and What it Could Mean for the Future of Content
Just over a decade ago, the world was consumed by a new wave of streaming. Platforms like Netflix and Hulu began delivering content straight to our TVs, laptops and phones, and streaming quickly became an everyday thing. Now it seems every major broadcasting company has managed to slap a “Plus” onto the end of their name and add another $6 to our monthly expenses just to give users the ability to stream their own content. Netflix, once considered a tidal wave in the streaming world, is now just one breaker in an ocean of streaming platforms. So how does Netflix become another tidal wave? Their answer: games.
Just last week, Netflix quietly launched a series of mobile games that are downloadable through the app. The games are completely free (with your subscription), no in-app purchases, and no ads. While most are just variations of previously existing iPhone games, there are some, such as an 8-bit Stranger Things game, that are specifically catered to Netflix’s original content. This comes after Netflix acquired Night School, an independent game developer, and hired an executive whose resume includes notable gaming companies Zynga and Electronic Arts. So you could say they knew what they were doing. But regardless of how enthused you are about the potential for a 8-bit Squid Game mobile game (would we be surprised to see this in two months?), what business does Netflix have in gaming?
According to an article posted by the Harvard Business Review, this business maneuver is referred to as an adjacency growth strategy. It’s defined as a strategy in which growth (both organically and through acquisitions) is achieved by departing from the core product or service and exposing themselves to newer markets. Similar to how Nike expanded into various sports markets and Apple moved into other communication devices like the iPod, iPad, and yes, even AppleTV+. In other words, it’s a strategy for Netflix to stay above the competition and defend the current core. By offering new benefits to existing customers at no incremental charge, Netflix is hoping to offset the steady decrease in new subscribers.
So what does this mean for streaming platforms and content creators? For one, rough waters if Netflix’s leap into the video game industry proves successful. It will show that sharing content and putting it in front of our audience isn’t going to be enough anymore, signaling a gradual shift from passive to active engagement. According to Nielsen data in 2018, 45% of consumers are on their phones or a second screen while watching TV. So if you think about it, of Netflix’s 209 million subscribers, roughly only 113 million of them are fully engaged in their content, while the rest are probably scrolling through their phones or computers, peaking at the screen every once in a while. On the other hand, a Nielsen study showed that upwards of 71% of millennials between the ages of 22 and 38 actively participate in gaming of some sort, often for several hours a week. That is valuable time consumers have to learn, understand and form a relationship with the content they are interacting with. Seems like it would be an effective way to make sure your audience is seeing your content. You can’t just put a shiny object in front of a consumer anymore—you have to make them engage with it.
But will people want to toggle between different types of interaction on the same platform? Netflix is the epicenter of our sit-and-do-nothing days. We sit for hours, binging the newest season of Stranger Things or rewatching the last season of The Great British Bake Off, and now they’re expecting us to play games too? It seems like a small yet cumbersome task for those expecting to be lazy throughout the day. The brain has a hard time switching between active and passive, and when a company’s core audience is comfortable in the latter, it becomes increasingly more difficult to get them to switch. Maybe this transition serves as a cautionary tale for those looking to diversify their content.
Whether Netflix is successful in the video game realm remains to be seen. It may catch on and become Netflix’s next greatest achievement, or it may fizzle and fade. Regardless, the move is a wake-up call for content creators to find ways to re-think and expand the ways their products are distributed. When you’re in a wave in a sea of other creators, you have to turn the tides to be a standout success.