Netflix is facing a decline in engagement, measured by the average time users spend on the platform and the completion rate of movies and series. According to a Wall Street Journal report, executives are considering introducing live TV channels and bundling third-party services to counter this trend. However, a simpler solution already exists: integration with Apple's TV app remains overlooked.
The engagement decline worries Netflix's leadership
Engagement is the holy grail in modern entertainment: satisfied users are less likely to cancel subscriptions. During an internal meeting, the negative metric began to surface and has since become a frequent topic. The company, which built its success on on-demand streaming, now seeks to recover ground with strategies reminiscent of traditional television.
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Live channels: a return to roots to combat choice paralysis
The idea is to introduce thematic channels that continuously stream movies, series, or specific genres, eliminating the need to manually browse the catalog. This feature, similar to offerings from competitors like Pluto TV, would also allow non-skippable ads, crucial for Netflix's ad-supported plan. Live channels could appear as tiles on the home page for instant access.
Bundles with Peacock: a strategy already used by Amazon and Apple
Beyond live channels, Netflix is exploring offering subscriptions to third-party services, such as NBCUniversal's Peacock, directly within its app. This mimics Amazon's Prime Video Channels and Apple's TV Channels. The goal is to increase perceived value and reduce churn. Yet the true opportunity, already at hand, remains integration with Apple's TV app.
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Apple TV integration: the most obvious and ignored fix
Apple TV users have long requested Netflix to support the native TV app, which aggregates content from multiple platforms. Despite collaborations between Apple and Netflix on events like Formula 1 and the series Drive to Survive, Netflix continues to refuse integration, preferring to keep users within its own app. At a time when engagement is declining, allowing content to be discovered outside the app could attract new subscribers and boost viewing. The custom video player, rather than Apple's native one, also poses a barrier.
As Anthropic recently showed with the Jacobian lens for analyzing neural networks, Netflix could also benefit from deep learning technologies to personalize live channels. However, ignoring the Apple ecosystem appears more related to competitive strategy than technical limitations. Time will tell whether the shift to live and bundles suffices, or whether the refusal to integrate with Apple TV proves a missed opportunity.
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Industry analysts note that Netflix's approach may work in the short term, but the lack of interoperability with third-party devices and platforms risks hindering future growth. Wikipedia documents the company's history of innovation; perhaps now it is time to look beyond its own walls.
