Netflix lost one million subscribers between this year’s April and July, as viewers quit the service due to strong competition.
The cancellations were the biggest ever recorded in the history of the company, with subscribers in the US and Canada on the first two places, followed by the ones in Europe.
The giant streaming platform has reported the first subscriber loss in 11 years in April, resulting in significant job cuts and share prices sudden drop. Nevertheless, with huge market competition and constantly increasing prices, the subscriber losses were predictable.
“When you’re the leader, there’s only one direction to go, especially when a large amount of competition launches, which is what Netflix has seen in the last couple of years”, commented Guy Bisson, executive director at Ampere Analysis.
The company has gained its reputation as a global giant especially during the Covid-19 pandemic, mainly while on lockdowns when people were stuck at home and desperately looked for ways to entertain themselves. As for now, as life slowly returns to normal Netflix experiences difficulties in persuading people to sign up and even to maintain its existing members, mainly due to high cost of daily life and increasing subscription fees. For example, standard plans in the US now cost $15.49, up from only $11 in 2019, while in the UK the same service can be accessed for £10.99.
Competition is also strong, with Apple TV, HBO Max, Amazon Prime and Disney+ coming from behind with great offers.
“Netflix’s subscriber loss was expected but it remains a sore point for a company that is wholly dependent on subscription revenue from consumers.
“Netflix is still the leader in video streaming but unless it finds more franchises that resonate widely, it will eventually struggle to stay ahead of competitors that are after its crown”, added Ross Benes, analyst for Insider Intelligence.
Netflix had 220 million subscribers at the end of June and a revenue of $7.9bn in April-June quarter, only 8.6% up when compared to the previous year. Moreover, the company’s share price has dropped by 60% in 2022.