Netflix subscribers are leaving in droves, and the reasons for this subscription exodus are multifaceted.
In a report from the New York Times, Netflix announced that it had lost 200,000 subscribers in the first quarter of 2022, and the news caused its stock to drop a dramatic 25%. It had predicted only three months prior that it would gain more than 2 million subscribers — but it’s now expected to lose another 2 million subscribers. This downward trend of loss points toward bigger issues facing the streaming giant.
After 15 years, Netflix is no longer reigning as it once did, and it’s made some questionable business decisions that have ostracized subscribers and perhaps scared others off. Inc. reported that Netflix has had a hard time drawing in new subscribers, while other options with less baggage have entered the arena and have had more success in that department. All of these reasons and more have put Netflix in a precarious situation that it needs to find a way out of.
Rise of the competition
One of the obvious reasons for Netflix’s decline is all the other streaming service options that have entered the game with stellar must-see content. Netflix is no longer the sole option for people to stream their favorite shows and movies. No longer having that monopoly has impacted its bottom line with the competition implementing efficient strategies to lure more subscribers in. HBO Max, Disney Plus, Hulu, Paramount Plus, Apple TV, Amazon Prime Video, and more all pose a threat to Netflix’s numbers with content that people are responding to.
Disney Plus knows that IP is the name of the game. It has the Star Wars universe with the ever-popular The Mandalorian and The Book of Boba Fett, and the highly successful MCU movies and original series that keep the interest flowing black and forth in a proficient loop. Disney even snatched its Marvel series away from Netflix and is incorporating the characters into their universe of superheroes.
Similarly, HBO Max has an array of DC content that makes it appealing, like Matt Reeves’ The Batman and exclusive Warner Bros. films. In 2021, HBO Max implemented a hybrid distribution model with same-day theater and home release, and The Hollywood Reporter reported that it ended the year with a combined 73.8 million global subscribers, surpassing its year-end projections of 73 million.
HBO has been known for its premium content for years, and that has helped it stay competitive in the streaming arena. Season 2 of its Zendaya-led drama Euphoria averaged 16.3 million viewers for its season 2, second only to Game of Thrones, and Succession season 3 firmly cemented itself as one of the best TV dramas out today.
Netflix has been less popular with its decisions. While so many streaming services are gaining momentum and continuing their shows, Netflix has unceremoniously axed many series which has upset its viewership. The OA, On My Block, Glow, The Chilling Adventures of Sabrina, and so many more have been canceled despite their popularity and critic scores. This has left subscribers feeling disgruntled in the wake of so many losses. Netflix was once represented as the anti-network option, and now it’s implementing a similar strategy.
Networks have also entered the arena in full force. NBC has Peacock, and when it retrieved the golden comedy The Office from Netflix, Peacock gained an impressive 242 million subscribers in its first quarter and put a huge Michael Scott-shaped dent in Netflix’s catalog.
Friends has gone to HBO Max and like The Office, it proves to be a consistent performer. The highly anticipated Friends: The Reunion special had an estimated 29% of U.S. streaming households on May 27, which shows how interested audiences are in this kind of content.
Netflix has also raised the price of its service. Netflix is raising the cost of its Basic plan from $8.99 per month to $9.99, and its Premium plan has gone from $13.99 to $15.49. It’s also been cracking down on password sharers, neither of which have gone over very well with its user base.
Netflix still has 219 million subscribers, making it the leading streaming service by a large margin, but it still needs to find ways of gaining subscribers. Netflix is considering adding an ad-supported version of its streaming service to help with the loss, but it will have to gain more popular content that draws people to it, not push them away.