For the first time in over 10 years, Netflix has lost subscribers and I hope the company won’t spend another 10 years adding new subscribers. The company recorded a total of 200,000 subscribers lost in Q1 of 2022 according to a recent report and the loss is set to continue for now. But why is one of the most popular streaming platforms losing subscribers and what is the possible fix to this?
Before we talk about what the problem is and how to fix it, let’s get an overview of what is actually happening over at Netflix.
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Since the suspension of its services in Russia, Netflix lost about 700,000 subscribers, and removing these numbers means Netflix only added 500,000 new subscribers in Q1 of 2022. This is way lower than the expected 2.5 million new subscribers the company had projected for the first quarter of 2022.
In the US and Canada, Netflix also lost about 600,000 subscribers due to the recent increase in price. Well, the company expected the subscriber loss. So, why are more people not joining Netflix?
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Why Netflix is losing subscribers
1. Account Sharing
Account sharing is one of the reasons why it seems Netflix is losing subscribers. Every streaming service has its plus and minus. By plus and minus I mean, people we join and people will leave (it’s normal). But because of account sharing, new people don’t necessarily have to subscribe to or join Netflix. I mean, why subscribe when I could just get my friend’s password and enjoy Netflix. So, technically, people are leaving Netflix but those joining are not subscribing to a new Netflix plan.
So, even if the number of Netflix users increases significantly, the numbers of new subscribers do not. According to an estimate from Netflix, about 222 million paying households are sharing with an additional 100 million households that are not being monetized. That is 100 million households that have not subscribed to a new Netflix plan buy enjoying the services via Account Sharing. But, this is not the only factor why Netflix is losing subscribers.
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2. Competition
Netflix is the second biggest video streaming service in the US (and the world). There is YouTube which is the number one, there is Hulu, there is Amazon Prime Video, and there is Vimeo, etc. The competition is heating up and these other streaming services are gaining grounds year in and year out. So, people are looking for alternatives to Netflix, comparing shows, prices, and quality to see which offers the best. And trust me, if someone gets to see one single reason to switch from Netflix to another streaming service, he/she will.
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3. Price
Compare to other streaming services, Netflix is relatively expensive. Netflix has updated and increased its price and currently, it’s the only streaming service known to charge users per streaming quality. So, for those who can no longer afford the services, it’s only fair to make the switch to another streaming service. And of course, even Netflix knows and expected this.
Fixing Netflix subscriber loss problems
There is no one fix for this issue but there are a couple of things Netflix is trying right now. For example, to help cub the account sharing issues, Netflix is currently running a test in Chile, Costa Rica, and Peru, where customers have to pay an extra fee to share their accounts with two people outside of their household. When the test was launched, Netflix said that it was working to “understand the utility of these two features” before making changes in other countries.
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Investing in more interesting shows is also another way to get users to pay for the services (I know I love the Adam Project). And also maybe throwing more money into advertising these TV shows will also help.
Lastly, a reduction in the price of subscriptions will go a long way. And while I don’t think Netflix will be ready to reduce its current price but the company might be able to work on bringing low-budget subscription plans. Having more affordable subscription plans can also help bring more subscribers to Netflix.
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Overall, the Netflix subscriber loss is due to policy changes, price changes, suspension of services in Russia, competition, and user sharing accounts. And I hope Netflix won’t spend the next decade fixing the subscriber loss for the first time in a decade.
