The technological bubble of streaming platforms

2 min. reading
Digital economy, Digitalisation, Social Media / 13 June, 2022
The technological bubble of streaming platforms

Karla García Gil Journalist

A global inflation resulting from the Russian invasion of Ukraine, the economic ravages of the pandemic, rising energy prices that have caused production and distribution costs to increase, as well as the return to normalcy by consumers of streaming platforms have deflated a technology bubble that is now beginning to stabilize.

One example is Amazon, the giant that increased its sales by 7% during the first quarter of this year, but which, in turn, recorded net losses of 3.6 billion euros in that period of time, compared to profits of 7.6 billion in the same quarter of the previous year.

As a way to alleviate the crisis, Amazon raised Prime subscription prices in the United States a few months ago, which only generated uncertainty in the markets. Something similar happened with Netflix. The giant announced that during the January-March period of this year it had lost subscribers for the first time in the last decade, which caused its shares to fall by up to 35 percent.

E-commerce-driven beauty industry: a billion-dollar business

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The main drivers of the sector are anti-aging products such as moisturizers, which grew 10.7%, and hair care products, with 8.5% growth.

Netflix lost 200,000 users of its platform; however, this is not so alarming considering that they expect to lose up to two million more in the coming months. Thus, the company has proposed to introduce advertising, reduce investment in marketing and own productions, end shared accounts, and take new subscriptions from among those who already use its platform.

Meanwhile, the music platform Spotify said that its case is completely different from that of Netflix, despite this, it has had to lower its growth expectations for the next quarter, it expects to grow only to 428 million active users. In the first three months of this year, they reached 422 million, that is, 19% more than the previous year.

On the other hand, the video streaming service Disney+ continues unstoppable in terms of growth. The platform increased its number of subscribers by 7.9 million, totaling 137.7 million, during the first three months of the year, up 33% over the previous year.

The consultancy KPMG, has assured that streaming platforms are facing a period of slow or no growth, which, in fact, was believed to occur within five years; however, it is occurring now. There is no room in the market for ten providers to have more than 100 million active users at the same time.

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