Netflix Subscriber Loss Nearing a Million

Between April and July this year, Netflix lost some of its glory: a million subscribers, that is. For two consecutive quarters, the streaming giant lost members. However, it was a smaller number than what the execs were expecting. 

Netflix boss Reed Hastings credits “Stranger Things” for the drop in the numbers. The fourth season of the hit series has been an astounding success. This may be the precise reason for the decline in subscriber departures.

Netflix Subscriber Loss

April 2011 was when Netflix reported its first subscriber loss. The news was then followed by job cuts in the hundreds. To make matters worst, the company felt a sharp drop in its share price. Rivals have mushroomed while price hikes took a considerable toll.

The disclosed losses were the company’s most prominent in its history. Subscribers from the US and Canada make up the bulk of the cancellations in the last three months. This was followed by Europe.

Ampere Analysis executive director Guy Bisson said that the Netflix subscriber loss was imminent. He added that a leader has only one way to go: down. This is especially crucial when competitors everywhere start to emerge from the market. 

This may seem a stark reality for Netflix, which has seen and enjoyed unparalleled success for quite some time. It disrupted the industry and has changed how people consume entertainment.

A Global Giant

Netflix gained global giant status when the Covid-19 pandemic hit in 2020. With almost everyone stuck at home, people had fewer options for entertainment. They turned to Netflix, and the company’s growth became unstoppable with smashing hits such as Squid Game and The Crown.

When people returned to their pre-pandemic habits, the firm had difficulties attracting new subscribers. Keeping the loyalty of the existing members was also a challenge. More so, when the cost of living rose, consumers started cutting down on expenses.

To add insult to injury, a slew of competitors emerged. Apple TV, Amazon Prime, HBO Max, and Disney+ were some of those that dispersed the subscribers. Sadly, the once disruptor had slowly become the disrupted.

The streaming giant’s move to make its service more costly also added to the cause of its subscriber exodus. 

Riskier Price Hikes

What once cost Americans around $14 in January is now priced at $15.49. This is from the $11 subscription cost in 2019. Bisson added that a threshold would be expected at some point. This makes hiking the subscription price a risky undertaking.

As of now, surveys show promising results. It seems that Netflix is managing to regain most of its subscriber loss. Many survey respondents also claim to retain their Netflix accounts should they be forced to choose one.

Netflix’s subscriber loss had been expected. However, it is still leading further than its closest competition. Insider Intelligence analyst Ross Benes said that Netflix is still the leader in video streaming. He added that they should find more franchises to avoid struggling to keep ahead of the game.

What Netflix is Doing

According to Netflix, it is now jumpstarting growth with its new ad-supported service. It is also doing its best to squash issues with password sharing. A study has shown that approximately $6 billion a year is lost due to the sharing of passwords.

Netflix is already charging more for shared accounts in some countries. These include countries in Central and South America. They hope to do the same for the rest of their subscribers worldwide.

Once the company solves all these issues, it must also ensure strong content materials if it wants to retain its status.