Arguably the most eyebrow-raising new title to drop on Netflix at the end of 2022 wasn’t Noah Baumbach’s $100 million adaptation of the notoriously “unfilmable” White Noise, or the unwatchable Kevin Hart–Mark Wahlberg comedy Me Time. It was Nike fitness videos, sandwiched between a new Witcher spinoff and the latest season of The Circle. And while the platform’s Jane Fonda-ification may seem strange, the partnership makes sense for Netflix, which is trying to boost engagement, establish new channels for affinity marketing, and distinguish itself from HBO Max.
It wasn’t long ago that Netflix seemingly had streaming all to itself. But the proliferation of competitors, and the increased expense of content production, has prompted the company to pull other business levers. Much of the industry has fixated on its advertising tier, in part because co-C.E.O. Reed Hastings had pooh-poohed it for years. Yet just as significant is the attempt to leverage its pure scale and saturation—Netflix is still by far the largest and most international player—to pivot beyond entertainment. Fitness and connected engagement can help keep Netflix the first screen of the connected home, and do so without adding lofty production costs.
As I predicted last week, we’re about to see much more bundling and cross-promotion of platforms and services in 2023. The streaming market, after all, is now so competitive that it’s basically unprofitable, forcing companies to find new ways to acquire and retain customers while increasing perceived value and decreasing costs. It’s a tall order, and immensely difficult to achieve with programming alone.