Netflix is looking to win over more total TV time among its subscribers around the world, but instead of prioritizing the largest screens in consumers’ homes, the company is laser-focused on the smallest ones.
The streaming giant, which last week reported nearly 214 million global subscribers, is laying the groundwork for more aggressive mobile engagement strategies, including with its previously announced early push into video games in markets like Poland, Italy and Spain. To that end, Netflix is making sure that users can easily find something to enjoy on mobile, including trailers for upcoming programming and mobile-only plans in certain international markets.
“The strategic priority is to meet our members where they’re at,” Greg Peters, Netflix’s chief product officer and chief operating officer, recently told investors. “The vast majority of our members engage with us on a mobile device. We want to make sure that when they’re at that moment, and sometimes that’s when they’re out and about, that they have the opportunity to get a great Netflix experience with their mobile phone.”
It may sound counterintuitive to the TV business, but winning over mobile screens is as important to Netflix’s continued growth ambitions as is the service’s buzzy, high-profile content like Squid Game. As its subscriber base begins to plateau in North America, finding ways to engage with consumers in different ways can be key to reducing churn and keeping customers coming back month after month.
“Mobile is something that permeates all of our lives. It’s a device that we have with us pretty much at arm’s reach at all times,” said Forrester vp and research director Mike Proulx. “This is a way that Netflix is able to really be always on in consumers’ lives.”
For Netflix, mobile gaming marks a natural extension of other interactive tests like the choose-your-own-adventure film Black Mirror: Bandersnatch that aligns with shifting consumer habits. In the third quarter of 2020, adults 18 years and older in the U.S. spent an average of three hours and eight minutes daily on their smartphones and tablets, according to Nielsen—fast approaching the average three hours and 41 minutes of average time spent daily on live and time-shifted TV.
Competing with Fortnite
Netflix has been homing in on gaming for several years, signaling to investors in 2019 that one of its biggest competitors in the market was the wildly popular Battle Royale video game Fortnite. “We earn consumer screen time, both mobile and television, away from a very broad set of competitors,” the company said then in a letter to shareholders. “We compete with (and lose to) Fortnite more than HBO.”
More recently, the company made a rare acquisition by buying up the indie video game developer Night School Studio to bolster its ability to create compelling games for its subscribers.
It’s not just about winning over consumers who are interested in gaming. An expansion into mobile experiences also gives Netflix the chance to improve the sticking power of its biggest franchises, keeping fans of the streamer’s shows invested and interested in those stories and characters between new seasons.
“We’re creating all these amazing universes and worlds and characters and storylines, and we can attach to the passion and fandom that our members have on viewing those on the video side with game experiences that allow them to go deeper and explore spaces that they wouldn’t have otherwise seen on the video side,” Peters explained. “We really think there’s a good connection and synergy there. Over time, we’ll try and bring those closer together and let those two worlds influence each other.”
Netflix has already shown an appetite for finding ways to engage and interact with subscribers outside of its regular programming. The streaming service has made several steps to bolster its merchandise footprint with its own ecommerce store and a wide-ranging partnership with Walmart, efforts that are designed to help improve the stickiness of Netflix as a service.
Combine mobile gaming and merchandise, and Netflix is building out “a bridge between the digital and physical worlds,” Proulx said—a bridge that may, if done right, help lessen churn and make Netflix more competitive in a crowded market. “Individuals could be more apt to retain their Netflix subscriptions versus canceling and resubscribing when the next season of their favorite shows are out.”
While it’s still early days, Netflix is already sharing its vision for the future—and it may be just a matter of time before other media companies start to follow suit.
“Imagine three years from now and some future Squid Game is launching, and it comes with an incredible array of interactive gaming options all built into the service,” Netflix co-CEO Reed Hastings said last week. “Then you’ve got your off-Netflix aspects, the experiences that we’re building out in consumer products. A company like Disney is still ahead of us in some of these dimensions of putting that whole experience together, but boy, are we making progress.”
