Netflix would be very seriously affected by the global crisis that we are going through at the moment, and that we will go through for a few months, at least that is what some analysts are starting to say now. Although it was thought that Netflix will only have to gain from the Coronavirus, in reality the analysts from Needham say that in fact things will not be like that, and the company will also be very seriously affected by what is happening globally due to the dangerous virus from China.
Netflix will be affected due to the fact that as more and more people are active in the platform to watch movies and series, it will have to consume more resources to distribute the content. This increase in resource consumption is normal, because more servers will be needed to transmit the content simultaneously to more devices, which already have subscriptions, but were not active at the same time in the past.
Netflix: CRISIS for the Platform that NO ONE thought of
Netflix it will not only have problems with an increase in operating costs that the platform will generate, but also with filming for new films and series, and this is because some areas are no longer accessible. I have known for some time about the fact that some films and series that were scheduled to shoot in Italy had this process suspended and postponed due to the Coronavirus, and the same thing will happen in other areas as the virus spreads.
“Netflix charges a flat price between $9 and $16/month in the US, regardless of how many hours are watched. More hours of viewing on existing servers are not monetized by Netflix. Netflix does not display advertising ads and has so far refused to commit to an advertising-based business model, despite widespread investor speculation, as the streaming market becomes increasingly crowded."
Netflix will not be the only film production company seriously affected by this problem, and that's because there are many who do the same thing, and at some point they will end up "fighting" on locations. Basically, Netflix has a double problem, of increasing operating costs, and of blocking the possibility to film in certain locations, but their effects will not be visible immediately, but in the following months, after new financial results will be announced, and on end of the year, if the launches of some productions will be postponed.
Netflix no analyst has yet calculated the possible impact on its activity, but most likely we are talking about a situation that will not be easily overlooked, and HBO, and other platforms, will have similar problems.
