THE number of Netflix subscribers has fallen for the first time in more than a decade, as it was revealed that the TV streaming giant lost 200,000 members in the first three months of this year.
What happened?
A combination of factors. Netflix has raised prices in key markets, including the US and UK, while pulling out of Russia in protest at the country's invasion of Ukraine.
It also cited increased competition in the streaming market and password sharing – which the firm is looking to crackdown on and monetise – as being drivers of subscriber loss.
In a letter to shareholders, Netflix said a surge in sign-ups during the pandemic had "obscured the picture" and warned that another two million subscribers were likely to leave in the three months to July.
The big picture?
The last time that Netflix – which has more than 220 million subscribers globally – reported losing customers was October 2011.
The company has indicated that more losses are coming, as well as hinting at a blitz on account sharing being imminent as it pushes to recruit new members. It is estimated that more than 100 million households are breaking its rules by sharing passwords.
What's next?
It has been suggested that Netflix could be exploring lower-priced, ad-supported plans after years of resisting this business model.
"Those who have followed Netflix know that I've been against the complexity of advertising, and a big fan of the simplicity of subscription," said co-founder and CEO Reed Hastings. "But, as much as I'm a fan of that, I'm a bigger fan of consumer choice."
He added "it's pretty clear" that ad-supported services are working for Disney and HBO.
How are other streaming services faring?
Analysts said the soaring cost of living has led to many UK households cutting back on streaming subscriptions. A total of 1.51 million services were cancelled in the first three months of 2022, says the market research firm Kantar.
It said more than half a million cancellations were attributed to "money saving", with households budgeting for higher prices and energy bills instead.
However, although "churn" rates increased almost across the board, Netflix and Amazon Prime Video may be faring slightly better than some of their rivals.
According to Kantar's research: "Netflix and Amazon can be seen to be 'hygiene' subscriptions for Brits; the last to go when households are forced to prioritise spend. Disney, Now, Discovery+ and BritBox all saw significant jumps in churn rates quarter-on-quarter."
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