Netflix has had a terrible 2022. In April, it said it lost subscribers for the first time since 2011 and its stock has tumbled more than 60 per cent so far this year, the media reported.
Yet its recent struggles may not be the start of a downward spiral or the beginning of the end for the streaming giant. Rather, it's a sign that Netflix is becoming a more traditional media company, CNN reported.
Netflix was originally valued as a Big Tech company, part of the Wall Street acronym, "FAANG", which stood for Facebook, Apple, Amazon, Netflix, and Google.
Wall Street once valued the company at about $300 billion, a number on par with many Big Tech companies that Netflix's business model ultimately couldn't live up to.
"I think Netflix was extremely overvalued," Julia Alexander, director of strategy at Parrot Analytics, told CNN Business.
"Unlike those companies that have different tentacles, Netflix does not have a lot of tentacles."
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But Netflix was never really a tech company, CNN reported.
Yes, it relied on subscriber growth like many companies in the tech world, but its subscriber growth was built on having films and TV shows that people wanted to watch and pay for. That's more like a studio in Hollywood than a tech company in Silicon Valley.
Netflix looked a lot more like a tech company than, say, Disney, Comcast, Paramount or CNN parent company Warner Bros. Discovery.
But as those traditional media companies start to look a lot more like Netflix, the OTT platform in turn is starting to take page out of its rivals' playbooks: It's going to start serving ads and it has been releasing some shows over the course of weeks and months rather than all at once.
"I think in many ways the moves Netflix are making suggest a transition from tech company to media company," Andrew Hare, a senior vice president of research at Magid, told CNN Business.
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"With the introduction of ads, crackdown on password sharing, marquee shows like 'Stranger Things' experimenting with a staggered release, we are seeing Netflix looking more like a traditional media company every day", CNN reported.
Hare added that Netflix's former business strategy, which was "once sacrosanct is now being thrown out the window."
