Increased streaming competition has hurt few companies as much as netflix (NFLX 2.96%). Yet while the company lost more than a million subscribers in the first half of 2022, Netflix remains the industry’s most influential streaming service. Here’s why.
The missing ingredient
Netflix released the documentary series Formula 1: drive to survive in March 2019 and has premiered new seasons of the show every year since. Each season consists of 10 episodes detailing the highs and lows of the Formula 1 (F1) racing season. The show’s immense success alone helped popularize a sport that has struggled to break into the American market for decades.
Although Formula 1 has enjoyed a huge following overseas for more than half a century, the sport has never caught on in the United States, where NASCAR reigns supreme. The motorsport series has attempted to break into the United States on several occasions, with American races held sporadically over the years. For example, Formula 1 Grand Prix races were held in the United States from 1989 to 1991, but no races were held in the country until 2000 as the popularity of the sport remained dismal. Additionally, the United States recently missed hosting Formula 1 events from 2008 to 2011.
However, F1’s popularity in the United States has grown significantly since Netflix premiered. Drive to survive, with corporate influence seeming to be the missing ingredient the sport needed all along. The show’s fourth season premiered in March and took the No. 1 spot for the most-watched show in the world with 29 million hours watched. Apart from Netflix’s high viewership, the show’s success has also led to an increase in US viewership for F1 races. The 2021 season saw an average of 946,000 US viewers per race, up 41% from 2019 – the last normal season as 2020 was impacted by COVID-19.
Netflix has had a lasting impact on Formula 1, with 2022 being the first year the United States hosted two of the season’s races and the first time Miami hosted a Grand Prix, resulting in record attendance. The 2023 season will go further by adding Las Vegas to the list for the first time, with a record three races held in the United States in a single year.
Influencing the competition
While Netflix has helped boost the sport exponentially, its success with Drive to survive also affected the content lineup of its biggest competitor. Streaming giants Apple (AAPL -0.29%), disney (SAY 2.33%)and Amazon (AMZN -0.99%) have all recently released or announced F1-themed projects in hopes of cashing in on the Netflix craze.
Amazon has launched its Prime Video docuseries Fernando in 2020, following Formula 1 driver Fernando Alonso as he navigates the racing season; the show received two seasons. Disney also joined the competition by announcing a Hulu original series centered around F1 driver Daniel Ricciardo, by far Netflix’s most featured driver. Drive to survive and incredibly popular in the US Another company to join the F1 takeover was Apple, which announced a Formula 1 film in the works starring Brad Pitt and a documentary following seven-time world champion Lewis Hamilton.
Few streaming companies have proven their power to influence competition and pop culture quite like Netflix. Disney is closing in with its superhero genre push, resulting in nearly every streaming platform eventually offering a series based on a group of heroes. However, Disney made Marvel the juggernaut it is today with the help of comic book characters that already had quite a large fan base. Netflix has proven its unique ability to grow brands with little to no fanbases and push them into the stratosphere. Its effect on Formula 1 is proof of this, with the immense success of its original series, stranger things and squid game.
Use its brands
Going forward, Netflix will want to continue developing the content that has hit the hardest. For example, if the company can offer more Formula 1 content for fans to turn to when they finish the final season of Drive to survivesubscribers will be less inclined to turn to the competition.
The company already has the following seasons of its biggest shows, stranger things and squid game, in the works, with the former even getting a spin-off show. The company is moving in the right direction, but subscriber retention will depend on what consumers watch once they finish the final seasons of their favorite shows. Therefore, offering additional content in popular genres must be Netflix’s goal with its upcoming content.
John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, is a board member of The Motley Fool. Dany Cook has no position in the stocks mentioned. The Motley Fool holds positions and recommends Amazon, Apple, Netflix and Walt Disney. The Motley Fool recommends the following options: January 2024 Long Calls at $145 on Walt Disney, March 2023 Long Calls at $120 on Apple, January 2024 Short Calls at $155 on Walt Disney and March 2023 Short Calls at 130 $ on Apple. The Motley Fool has a disclosure policy.