Stranger Things?? Stranger Things.
Kavitha Babu
Will Byers goes missing, Mike meets Eleven, and the demogorgon isn’t just part of “Dungeons and Dragons” anymore, and from then on, everything goes downhill. Strangers Things has taken the world by storm and months after its release it is still in the minds of viewers. The science-fiction, horror television show was released on Netflix on July 15, 2016. Since then, not only has it increased the assets and sales of Netflix, but it also has been one of the most buzzed about shows of 2016. It has revolutionized the television industry, and I can say this because it’s not like I’m biased or anything.
The first season, which consists of eight episodes, has been acclaimed for its characterization, pacing, writing, directing, soundtrack, and even its homage to 1980’s pop culture. Being a Netflix Original, this show has advanced the company in terms of its finances and demand. And as an avid fanatic of the show, I can assure you that it has improved the lives of millions of people.
The addition of the show increased the stocks of Netflix by nearly 29%. As of July 22, 2016, stocks were priced at approximately $86. As of December 8th, they were priced at approximately $125. Since the release of “Stranger Things” there has been an increase of nearly $30, and in just five months. Beforehand, as you can see in the graph below, stocks were decreasing in July of 2016. After Stranger Things came out, stocks went up and have been increasing (as a whole) since then.
Not only did the emergence of Stranger Things increase Netflix’s stocks, but it also improved their assets tremendously. In the second quarter of 2016, March to June, their assets increased by $300,000. For many companies, that would a whopping amount of money. But get this, in the next quarter (June to September) after Stranger Things was released, Netflix’s assets increased from $11,593,507 to $17,541,231 - nearly 6 million dollars. It’s crazy how much of an impact this one show has had on the firm. This is also in part by the contract created between Hot Topic and Netflix. Hot Topic is well known for the merchandise they carry for the music industry and for the entertainment industry. They now carry an entire line of Stranger Things merch. This was a really good play on the side of Netflix. Since the show has had so much buzz, they can continue the excitement by releasing shirts and keychains and accessories. This increases sales for both Hot Topic and for Netflix, making it a win in terms of revenue for both companies and its consumers.
If all this justs seems like a coincidence, then another coincidence is that the amount of Netflix subscribers increased by 3 million in the third quarter (a.k.a the quarter in which Stranger Things was released). In the quarter beforehand, the increase of subscribers was 1.5 million. From the beginning of 2016 the amount of subscribers seemed to increase on a steady rate, yet after the show was released the increase doubled. The demand for Netflix increased because of Stranger Things, causing for more people to buy a subscription.
It sounds to me like Stranger Things really has made an impact. Many people might think that the third quarter of 2016 was particularly good to Netflix, but I would make the case that it was because of Stranger Things. I’m pretty sure if you were to look back at times when House of Cards or Orange is the New Black was released, there would be similar trends.
As we look back at what 2016 has been, Stranger Things is one of the most prominent parts. I mean, it’s referred to in the first 20 seconds of Youtube Rewind (which if you don’t know is a video compiling the biggest trends of the year. If you do go decide to watch it, the first reference is of the two guys riding the bikes towards the screen, while the second and third are shortly after with the same people. They are supposed to be Will and Mike).
Stranger Things is one of my favorite things in the entire world. So, if you still aren’t convinced to watch, then here’s the trailer. And if that doesn’t do it, then I’m terribly sorry for the deprived life you live.
I have never been a big watcher of Netflix, but stranger things did change that for a few weeks this summer. I never really thought a show like this is the sify plot and immortal characters would really appeal to me, but I got hooked. Not only has it brought new viewers and people to Netflix now, but the end of the movie keeps you hanging and constantly checking Netflix for what comes next.
ReplyDeleteI think it was a great idea for Netflix to come out with it's own original shows. With the growing supply of Netflix-like streaming services, they are working hard to keep up the demand for their particular service. People may have opted for other streaming services in the past, but once they saw that there would be original shows, the opportunity cost shifted to include these shows. It looks like for many customers Stranger Things may have been the tipping point to trigger subscriptions.
ReplyDeleteI think Netflix really did create an advantage over other streaming services like Hulu or Amazon Prime, since they have original shows. And since they have all become so popular, Netflix has brought in a whole new group of subscriptions. One day I think a lot of TV providers will turn into a streaming service or merge with preexisting ones. For example, ABC already have an app, except you need to have a subscription through your TV provider. A lot of people watch this channel because of Grey’s Anatomy or Scandal, so maybe one day they will merge with a streaming service like Netflix and bring out new episodes every week directly on the internet. But, I don’t think we will see this change any time in the near future. It’s exciting, however, to think about what TV will be like fifty years from now, because in the course of twenty years, the industry has changed drastically.
DeleteI find it hard to believe Netflix is best off coming up with their own series, as I would purchase a subscription regardless of if they have their own content or not. I would be curious however, if they would be able to turn a larger profit by instead trying to advertise their original series to others and have them put on TV, as the cost of cable is far more expensive with the limited competition, and generates a large amount of revenue.
ReplyDeleteIt is surprising how many people created a Netflix subscription in the same period that Stranger Things came out, however,it might not be just because of this one show. Netflix can increase their revenue by adding more of their series because there would be only one source to be able to watch it on which would increase the amount of subscriptions. Netflix is obviously cheaper than cable and with more of its own series, Netflix would become a primary way of watching shows.
ReplyDeleteNetflix is one of the smartest streaming services, as they realized the true economic benefit of simply investing in their own exclusive shows. Other providers, such as Hulu and HBO, have also seen this benefit, because the exclusivity of high demand shows draws customers into their service, simply over one show. I know from personal expirience that I chose netflix over hulu not because of the brand name,but because of the comparison of exclusive shows. The benefits of doing so only start there. Netflix does not have to share the revenue of the shows they create with their creators, as the shows are produced within the company, therefore increasing the marginal revenue for their company. In the end, it is interesting to see that by creating an exclusive hit show, Netflix has seen a bump in stock prices and overall sales.
ReplyDeleteNetflix really knows what they're doing in terms of managing their resources and knowing how to hook people to their service. By creating their own exclusive shows, that people are obsessed with, they always have people checking back for more of that show. Additionally, the more these people check back for that one show the more likely they are to watch a separate show. Finally, Netflix is really a special company because they carved out a niche for themselves in a crowded streaming industry, having a multitude of exclusive shows allows them to do this.
ReplyDeleteI have personally never seen this particular show however I do watch house of cards and know Netflix started something perfect their own shows that are only on Netflix. As the statistics show they are earning nearly 6 million just because of one show. If they could create a show like walking dead on just Netflix it would be deadly to actual TV networks. I could see Netflix taking over television as we know it in the near future.
ReplyDeleteI have heard many positive things about this show, and even have been told by many people to watch it. After reading your blog and understanding that this just isn't a "Pewaukee Show" I see now how it can have that much of an effect on Netflix. With the sales and the assets of Netflix constantly increasing and being able to produce more of the Netflix originals, no longer will the average cable service be needed. I definitely agree with Nick: Netflix has a change to take over television.
ReplyDeleteNetflix is a fan favorite for most and the release of Netflix originals is a good risk to take. Many people have been talking about the show in a positive way and it encourages more people to watch the show, subscribe to Netflix and for Netflix to continue to make their own shows. People are constantly demanding new shows to watch so I can see how it increased subscribers and profit. Because these shows are exclusive, Netflix has created a name and niche for themselves which is hard for companies to compete with.
ReplyDeleteWhile Netflix has surely benefited from the increased demand due to Stranger Things and other original series, I think they may be able to increase their total revenue if they sell one or more of their series to a standard television channel. Since Stranger Things is very popular right now, they would be able to get a good price for it. If they wait to do this, the fan base for the show will gradually decrease and therefore so would the profit they make from selling.
ReplyDeleteI have heard many good things about Stranger Things but never though of the economic effect it has. By Netflix coming out with more and more shows that continue to be popular, they are starting to become more popular than cable tv. It is cheaper and there are no commercials which appeals to our generation. This allows them to differentiate their product from other similar companies like Hulu and amazon prime tv. All in all with popular tv shows and a unbeatable price, I can see more people switching to only have Netflix rather than cable tv.
ReplyDeleteNetflix was originally an organization that compiled specific movies and television shows at a monthly fee. Releasing its own specific shows and movies only available on Netflix has set it further apart for its competitors that can accomplish this same original goal (and a lot of them with more recent shows that are updated more frequently). And they have merchandise for these shows on top of this. I can only see Netflix continuing to increase its profits in the future as continue to release more original shows and movies.
ReplyDeleteI can say after watching Stranger Things that it is truly a great show but it never occurred to me that it produced economic effects to the Netflix company. As Netflix continues to set itself apart from competitors by not only providing set movies and shows but now creating their own they are expanding the economic effect in a positive way. They are smart as they are not only gaining subscribers as they hear about these Netflix originals and also within the merchandise. I believe that as they continue this they will increase profits.
ReplyDeleteOverall, the decision to create original series was a strategic move for Netflix. While other streaming services may have movies or TV shows that Netflix does not, Netflix can boast they they are the only platform on which their original series can be found. Due to the relative scarcity of their products, Netflix now has higher demand and gains more revenue. Having one of their original series become so popular has served as a testament to the quality of their product in a competitive market, and social media acclaim and celebrity promotion has convinced consumers that they will benefit from subscribing to Netflix.
ReplyDeleteI myself haven't seen the show yet, but I've been planning on it, and after reading this post I want to watch the show even more. Knowing about the economics behind this show is so interesting and cool. It's amazing how one show could bring in so many subscribers for Netflix, and how a partnership with Hot Topic brings in even more sales and fans. I'm intrigued to know now how they first advertised the release of the show; it's not like millions of people just knew about this show over night. Whoever produced this show and ran the marketing side of things really knew what they were doing when they released the show, then reached out to Hot Topic, and maybe even the release date had something to do with the surge of new subscribers to Nextflix. Overall, this is an awesome post and I think I'll start watching Stranger Things tonight.
ReplyDeleteStranger Things is an incredibly addicting show and many people are addicted to it. One of the smartest moves that Netflix has done is recently creating shows and movies that are only available on Netflix. It has become a wise marketing strategy to increase the demand of people wanting to be a part of the elusive Netflix membership club. The popularity of shows like Stranger Things has increased revenue for Netflix and I agree with you that it has become an incredibly wise move on their part. Especially with new features of downloading tv shows and the exclusive shows that are only on Netflix! I am interested to see how this changes and develops the entertainment industry and sparks a decrease in demand for cable networking and an increase in demand for memberships in Netflix and Amazon Prime.
ReplyDeleteI haven't seen the show yet, but I have heard of it and I know how big TV series can impact these companies. I'm currently writing my blog post about one of BBC's series (Sherlock), and I can see that these shows influence the economy more than we thought. It's interesting seeing how this type of entertainment is so big in the economics part of the government, and it gets better for more shows. I do agree that the more popular the show, the more subscribers or customers stores and companies get because of it. It seems like with more interesting TV shows being created, Netflix may be a better choice for consumers other than Cable. Especially since Stranger Things is a Netflix Original,.. It's cool seeing how more shows are causing a better output for the economy as a whole.
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