Netflix is planning to do a reality show “Squid Game: The Challenge” which is named after its popular show “Squid Game.” Notably, Squid Game has been the most-watched show in Netflix’s history and was watched for 1.65 billion hours in the first 28 days only.

Capitalizing on the show’s popularity, Netflix added millions of new subscribers in the back half of 2021. The company is also rumored to be working on the second season of Squid Games.

The popularity of Squid Games also propelled Netflix stock and it hit its all-time high in November 2021. Since then, things have been tough for the company though. Its earnings were subdued in the fourth quarter of 2021 and the stock crashed after the earnings release.

netflix stock price

The stock slumped even further and fell to multi-year lows after it reported that it lost 200,000 subscribers in the first quarter of 2022 and expects to lose another half a million subscribers in the second quarter.

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Netflix Plans to Win Subscribers with Squid Game

Squid Game helped turned around Netflix’s fortunes last year. The company is planning to capitalize on the show’s popularity at a time when it is witnessing a severe growth slowdown after many years of strong growth. During its first-quarter earnings call, it admitted that its growth is slowing down and it is reaching saturation levels in many markets. Slowing growth and Federal Reserve’s rate hikes amid rising inflation have taken a toll on Netflix stock in 2022 and it is down 70% for the year. While Wall Street analysts turned bearish on Netflix stock after its second-quarter earnings release, many see the crash in Netflix as a good opportunity to buy the stock.

During the first quarter of 2022 earnings call, Netflix also said that it would now crack down on households that watch its content through password sharing. It estimates that 100 million households globally watch its content through shared passwords. The company is also considering an ad-supported version in order to lower the subscription price. Notably, Netflix plans are pricier than many streaming companies even as it has lowered prices in developing countries to attract more subscribers.

Netflix Has Canceled Some Shows to Preserve Cash

Netflix has double trouble at hand. On the one hand, it has to invest in new content to win new subscribers. On the other hand, the company also has to protect its margins. It has canceled some shows including Pearl, which was an animated series created by Meghan Markle. The streaming company is also shutting down the Tudum website which carried behind the scene action.

Netflix has been facing stiff competition from other streaming companies including Disney. The company now has to look at ways to not only retain but also acquire new subscribers. Many are speculating whether the company would have a relook at its binge-watching model as it makes it easier for people to leave the platform after watching their favorite show. Recently there were also rumors that Netflix might acquire Roku. However, none of the companies has confirmed the development.

For now, Netflix might be looking to bank on the popularity of Squid Games to revive its fortunes at a time when the streaming war is really heating up.

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