Netflix, the market-leading online streaming platform, is going through a challenging phase as it lost almost a million subscribers between April and July this year, according to BBC.
Notably, Netflix had roughly 220 million subscribers by June this year. The company counted its revenue of $7.9bn in the April-June quarter, up just 8.6% year-on-year. Additionally, its share price has decreased by more than 60% this year, as investors are concerned about the company’s prospects. Coming through years of unstoppable growth, the sudden fall has been challenging. In 2011, Netflix experienced a sharp drop in its share price and had to cut hundreds of jobs. Now, it’s the first time the streaming giant has reported subscriber loss since then.
Shows like ‘Squid Game’ and ‘The Crown’ played a significant role in its growth during the pandemic lockdown period in 2020. Squid Game was reported to be the most-watched show globally in Netflix history as of 2021. It’s the first and foremost reason that people have returned to their normal life and now don’t get plenty of leisure time for entertainment. However, the recently released new season of Stranger Things has been a phenomenal success and struggled alone to resist users’ exits from the platform.
Other streaming platforms such as Apple TV, HBO Max, Amazon Prime and Disney Plus, with better offerings, are emerging as bigger competitors for Netflix. Increasing subscription fees has also been a risky strategy for Netflix. US customers could use the service simultaneously on two devices with its ‘standard’ plan. Now it costs $15.49 while it was $14 this January. In the UK, both primary and standard plans have increased since January by £1 a month to £6.99 and £10.99 respectively.
The recent global price hike is a major player behind the subscription fall as people are more diverting toward saving and not investing in luxury or less essential goods. Research finds that people are increasingly signing up to watch specific shows and then cancelling accounts, reports BBC.
Show cancellation, a new unpopular gesture of Netflix, also causes losing its customers as people get pissed off with it. It hampers users’ trust in the platform. Subscribers are now aware that there’s always a possibility of cancellation. So, they show selective behaviour in terms of consumption. Just as in 2021, it continued to give many series a cancellation. Netflix has already declined more than 21 TV shows this year.
However, Netflix still leads the global streaming market and remains the most popular. Only how with new strategies the company arises from the fall and comes back strong is the thing that awaits to see.
