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Netflix Explores Live Channels, Bundles Amid Slipping Viewer Engagement: WSJ Report
Netflix (NASDAQ: NFLX) is reportedly considering a fundamental shift from its pure on-demand model by exploring the addition of live streaming channels and third-party service bundles. The potential move, reported by The Wall Street Journal, is aimed at combating a decline in user engagement and bolstering its crucial advertising-supported business.
A Potential Strategy Overhaul
According to the report, top executives have discussed introducing continuous, live-programmed channels, a significant departure from the company's long-standing focus on its on-demand library. The company is also said to be weighing the possibility of bundling other streaming services, such as NBCUniversal’s Peacock, directly within the Netflix experience.
This strategy could transform Netflix into a more comprehensive entertainment hub. By keeping users on its platform longer, the company could increase the value of its ad-supported subscription tier and reduce subscriber churn in a highly competitive market.
Declining Engagement Prompts Action
The internal discussions come as Netflix faces mounting pressure from slowing growth. According to Nielsen data cited by the WSJ, Netflix's share of U.S. television viewership fell to a multi-year low of 7.8% in April.
AdThe company's stock has reflected these challenges, with shares down over 40% in the past year. The report also noted the context of a failed bid for Warner Bros. Discovery’s studio assets and efforts to incorporate lower-cost content, such as short-form videos, to manage programming expenses.
Market Reaction
Investors reacted cautiously to the potential operational changes. Shares of Netflix fell 2% in after-hours trading on Thursday following the publication of the report.
The news highlights the increasing industry pressure on the streaming pioneer to evolve its business model to defend its market position against legacy media competitors and new digital entrants.