Netflix wants to keep viewers with dance balls and events

Passers-by stop in amazement at this sight: On Friday afternoon, women in bulky ball gowns stroll along San Francisco’s Market Street shopping mile and into a former factory building. Among them are Angelica and Elizabeth, both 41, who made the journey from Sacramento, a two-hour drive away. Her hair is blow-dried into curls, plastic tiaras adorn her décolletés, satin gloves reach to her elbows. For the next 90 minutes, they will immerse themselves in the 19th century and visit the “Queen’s Ball” – a newly created “Netflix Experience” based on the hit series “Bridgerton”. “We love this show,” Angelica says with a sigh.

“Bridgerton” is one of the most successful shows on the streaming platform ever, with women between the ages of 18 and 45 in particular tuning in to the two previous seasons. This is surprising, because the plot turns every feminist’s stomach: In London in 1813, women have no greater concern than getting married as soon as possible, at debutante balls they ensnare potential husbands. The show’s producer, Shonda Rhimes, is the same as “Grey’s Anatomy,” one of the top-grossing television shows of all time in the 18- to 40-year-old bracket to date. “When women like something, they quickly become hardcore fans,” says Rhimes.

In order to swear the fans to the new series, Netflix moves into the real world with a “Bridgerton Experience”. The concept is easy to explain: the guests first court the Queen, then learn the quadrille from professional dancers before continuing into the ballroom. “We don’t need wallflowers,” a voice with a fake British accent sounds through the speakers. “Please get on the dance floor.” The visitors – girlfriends, mothers and daughters, and a couple of married couples – follow happily; they are all dressed up as if they were about to go on to Buckingham Palace. They sometimes dance to violin versions of pop songs by Billie Eilish and Ariana Grande, sometimes they watch the actors perform dance and acrobatics.

The whole thing feels like an American high school prom for adults. “We love it, it was even better than we thought,” say friends Chante, 19, and Ariya, 20, as they leave. They bought the tickets months ago and rented the ball gowns from a costume shop.

With the end of the pandemic, many are also canceling their Netflix subscriptions

Until now, Netflix is ​​known as the world’s leading video streaming service. The company with 11,000 employees from Los Gatos in Northern California has made a significant contribution to revolutionizing the film business – first with DVD rental by mail, then with a streaming platform and in-house film production. In the meantime, the former startup has developed into a publicly traded company worth 100 billion dollars with annual sales of 30 billion dollars.

But after 15 years in the streaming business, Netflix is ​​fighting against relegation, and viewers are running away from the platform, which recently had 220 million paying subscribers. Netflix has now lost subscribers for the second quarter in a row, with 670,000 users closing their accounts in the important home market of the USA alone between April and June.

The first explanation for this is the end of the corona pandemic. In 2020, when millions of people hid in their homes and fled to parallel worlds thanks to Netflix, the platform gained 36 million viewers, a third more than in the previous year. But now that you can eat out, go to concerts and travel again, interest in series and films is falling.

Second, Netflix is ​​breathing down the competition: Media groups from Amazon to Apple to Disney have recognized that streaming is the future of television and are pouring billions into their own offerings. With success, quarter after quarter, they are now contesting shares from the market leader. Amazon’s Prime Video service is now almost on a par with Netflix, with the two having a market share of around one-fifth in the US.

In North America in particular, Netflix seems to have reached market saturation with 75 million paying customers. Many also left the platform when Netflix hiked prices earlier this year. Since then, the share has lost around two-thirds of its value. In the past months dismissed the company several hundred employees.

Don’t just watch Netflix, experience it

Los Gatos is now urgently looking for new revenue opportunities. One idea: “Experiences” like the “Queen’s Ball” for the “Bridgerton” series. Customers shouldn’t just watch Netflix, they should experience it. Media companies like Disney and Universal Studios have shown how to build amusement parks and cruise ships around fictional characters.

Now Netflix is ​​also sending its series heroes on tour: The “Queen’s Ball” is currently in San Francisco for three months with eleven shows a week, and the 300 tickets per evening are almost sold out. The show also made guest appearances in Los Angeles, Montreal, Chicago, Atlanta and Washington. The next step will be to move on to South America and Europe, the tour manager says in an interview, events in Spain, Portugal, France and London are already planned.

“The boundaries between fiction and reality should disappear,” Netflix describes the concept. Several selfie stations on site – a red and gold velvet couch, a flower tunnel – should help to offer “Instagram-worthy moments”. This allows visitors to be used for free advertising in social networks. The strategy seems to be working: on Instagram alone, tens of thousands of photos are tagged with the “Bridgerton Experience”.

Event tour also with «Stranger Things»

Netflix is ​​also testing the “Experiences” concept with “Stranger Things”, a popular science fiction series for teenagers. A separate show is also touring through the USA, in which the young visitors have to fulfill tasks.

Events should become part of Netflix’s series concept, which are already taken into account in the creation process of a show. “We see this as another way for fans to be more deeply involved in the shows they love,” said Greg Lombardo, Netflix’s Experiences director.

Netflix has also recently followed the marketing textbook with its fan articles. The “Bridgerton Experience” is completely commercialized: The souvenir shop sells hoodies with the logo, as well as water cups and lavender soap. Visitors can also order a “Whistledown & Dirty” cocktail – vodka, mint and lemonade – at the bar for a whopping $16. The series even has its own make-up line. Bloomingdale’s department store sells Bridgerton hair clips for $228 and heels for just under $1,000. On Amazon you can find complete evening outfits under the keyword.

The mantra “No Ads on Netflix” is being lost

Another idea to make the platform more profitable: advertising. So far, founder and co-CEO Reed Hastings has declined, “no ads on Netflix, period,” he wrote 2015 on Facebook. He later explained that Netflix should be the “safe haven” where user behavior is not monitored and evaluated for advertising.

But in the spring, the chief financial officer suddenly said that one should never say “never” about advertising – and recently Netflix announced that Microsoft had now been commissioned to develop a cheaper, advertising-financed subscription model for the platform. This is to be launched in the next one to two years. Experts say this is the most radical change at Netflix since the switch from DVD distribution to the streaming platform in 2007.

But advertising isn’t the only taboo Netflix is ​​now breaking. Suddenly, action is being taken against the sharing of passwords. Netflix has an estimated 100 million shadow viewers today – people who got the access data from the brother of the brother-in-law’s ex-girlfriend or in similar abstruse constellations. According to product chief Greg Peters, this practice has actually helped the platform grow as more and more people have tried and enjoyed the service. As recently as 2017, Netflix tweeted: “Love is sharing the password.”

That should change. Based on the IP address, the device identification number and the activity of an account, you know exactly which users belong to a household, according to Netflix. If people share an account across households in the future, it should cost more; “Paid sharing” is the new motto.

Even the picture quality is now used as a lever to squeeze more money out of viewers: If you want to see the series and films in the highest resolution (4K), you have to pay just under $20 a month in the USA – twice as much as the cheapest subscription with poorer resolution (480 pixels).

Even “binge-watching”, i.e. playing all episodes of a serial series in one day, could now fall victim to profit. Previously, Netflix released all new episodes of a series in one fell swoop. Die-hard fans watched an entire season at once in marathon sessions – and then canceled their subscriptions. It is therefore more lucrative for Netflix to release episodes in dribbles: viewers talk more about a series and pay longer for their subscription. For this reason, Netflix has recently started releasing new episodes of series like “Stranger Things” bit by bit – just like the competing platforms are doing.

On the hunt for the next James Bond

Above all, Netflix wants to convince viewers with content. 17 to 18 billion dollars will be spent on new films and series this year, said CFO Spence Neuman recently in a call to investors. Netflix just released its most expensive film to date, spy action thriller «Gray Man» starring Hollywood beau Ryan Gosling. The production cost 200 million dollars – these sums are more reminiscent of Hollywood or Disney productions. It is hoped that the series about the agent Court Gentry will achieve cult status like the “James Bond” films.

The coming months will show whether the new strategy will pay off. The market research company Nielsen reportsrevealed that the platform actually had the largest share of TV minutes in the US in June – 7.7 percent. “That’s the highest we’ve ever achieved,” said CFO Neuman. Visitors to the “Bridgerton Experience” may have played their part.

The NZZ correspondent Marie-Astrid Langer follow on twitter.