AUTHOR: Mehr Minhas
(Student, Grade 12, Vivek High School, Chandigarh)
If companies like Netflix were offered Aladdin’s lamp, they would wish for the lockdowns and curfews, a subsequent result of the pandemic to never end. From their business and revenue perspective this isn’t wrong. Many businesses have flourished during the pandemic. But sadly for them, the world is returning back to its normal and there seems to be hope in many countries for lockdowns to be lifted. Now what will happen to the companies in the real world not inspired by Disney movies?
The first company in question is Netflix. We have all been guilty of staying up till 5 in the morning and completely destroying our sleep schedule because we wanted to finish an entire season in one day. Netflix saw an overwhelming amount of new subscribers during the year 2020, but only 3.98 million subscribers joined Netflix in the first quarter of 2021 while the prediction was almost 30% more. This shortfall has led to a devastating result. Shares have fallen down 11% and the company evaluation also fell down. The stock market isn’t looking too good for Netflix. Considering the demand of Disney plus and other streaming services, Netflix is facing tough competition.
The second company in question is Zoom. This app has replaced massive office and school buildings, since the past year. Since many schools have started to shift to an offline arena, zoom is losing its members. Zoom had a revenue of 188.3 million dollars in the last quarter of 2020. But will it be able to keep it up when things go back to normal? Will zoom be in demand when offices start to open again? The answer is most likely to be no. Zoom will not have the same profits that it did during the peak of the pandemic all over the world.
These two companies will definitely witness a loss in profit which will keep on increasing. Don’t get me wrong, these companies will definitely flourish but not to the extent they flourished during the pandemic. Along with these two companies, an industry comes to mind, the liquor industry. During the pandemic the unemployment rates increased heavily and that had a positive impact on their profits and revenue. Alcoholism increased as it helped people cope with their employment situation.
Since employment rates are increasing, alcoholism is decreasing thus, decreasing the impact the pandemic had on the liquor companies during the lockdown. There was an increase in membership of wine clubs in countries like America. This rise in sale was universal. But, all liquor companies didn’t profit equally. Companies which sell wine and beer saw the highest increase and since people stopped socializing in large groups, had pay cuts; expensive brands didn’t see a massive increase. India, which is one of the biggest consumers of alcohol, saw an increase in countryside and homemade alcohol, to a very high extent. What can these companies do to make sure that their demand doesn’t decline instantly? When the demand increases during times like a crisis or a disaster which this pandemic is, chances are that the demand won’t be able to keep up. How can these companies keep up with their current or previous sales?
Firstly, Netflix is unique due to its original web series like You, money heist, sacred games which have been in demand all over the world. These original series help increase the demand for such shows and increases the membership. People don’t subscribe to Netflix because of the amount of original shows it has, they subscribe because of the quality of shows. Thus, netlfix needs to keep up with the quality of shows it produced before. Similarly, netlfix needs to start movie premiers with an additional small fee. Since lockdowns are prominent in many countries due to the second wave people will definitely opt for this. Money heist is one of the most successful shows on Netlfix and helped gain millions of customers. More than 40 million households watched the series. They then spread the word about the show, causing many people to take up subscriptions solely for the show. Thus, quality shows are the key for future success. Netflix also needs to tap into potential markets of India. Netflix desperately needs to combine forces with companies who offer mobile data to certain markets in India. It is likely that majority of the people with access to internet and a smart phone or a television have a subscription to an online streaming service. Finding new members for Netlfix will be a challenge. Thus, Netflix needs to increase the number of people who have access to high speech internet in places in India by forming a partnership with companies like Airtel or Jio. Providing a free membership for 2 months or so will give exposure to people which they won’t be able to quit. Thus, subscribing to Netflix for the long term.
Zoom on the other hand, needs to start providing packages which include family, like apple music does; it encourages more people to join in at a profitable rate. Zoom needs to introduce student discounts for college and university students who might not be able to afford this otherwise. Alcohol companies need to introduce special or limited bottles which are unique and attract buyers but at the same time, not increase the price by a big number
In conclusion, these companies need to start preparing for the future and come up with new ways to keep their business afloat.