Following Netflix’s “Black Tuesday” announcement on April 19 that it had misplaced streaming subscribers for the primary time in additional than a decade, a consensus rapidly emerged amongst many pundits scrutinizing the corporate’s enterprise that the sudden progress Behind the disaster was flawed content material technique.
Maybe ignored was an element that Netflix first ticked off in its quarterly shareholder letter — the “uptake of linked TVs,” which has slowed considerably world wide resulting from a worldwide provide chain drawback.
Roku additionally tried to focus on the difficulty in November, when CFO Steve Louden instructed buyers that US good TVs had risen 42% in value and gross sales had been down 31%. “The availability chain disruption that I discussed is affecting numerous industries,” he stated.
It was ignored by this publication – and maybe many others – when the Shopper Expertise Affiliation launched figures in February that predicted good TV shipments would fall 13% in 2022 to lower than 40.4 million items. This was after dropping practically 6% final yr to greater than 46.6 million TVs.
Good TVs are the way in which 70% of American shoppers use linked TVs, in keeping with information launched by Samsung earlier this week. Fewer good TV shipments imply fewer shoppers are adopting streaming and subscribing to providers like Netflix.
The CTA stated, “Because of provide chain considerations, producers have needed to focus their priorities on massive full-featured TVs, the place margins are greatest. Till the price comes down, many shoppers improve to worth TVs of their residing rooms.” can shut down.”
The availability chain drawback, in fact, extends far past the US market. By many accounts, the chip scarcity is looming, however its results on the underside line of streaming adoption world wide are most likely nonetheless being felt.
Shopper electronics business tracker Trendforce expects international TV shipments to succeed in round 217 million items this yr, up 3.4% from 2021. However the estimated cargo depend is just flat with 2017 ranges.