Snippet: Netflix Loses Subscribers for the First Time in Over a Decade ☇
Chris Welch for The Verge:
Netflix’s struggle to boost its subscriber count took a dire turn in the first quarter of 2022. The company reported a loss of 200,000 subscribers globally compared to Q4, and it’s forecasting even bigger losses to come. Netflix estimates it could lose up to 2 million subscribers in the second quarter.
“Our revenue growth has slowed considerably,” Netflix acknowledged in its letter to shareholders. “Covid clouded the picture by significantly increasing our growth in 2020, leading us to believe that most of our slowing growth in 2021 was due to the Covid pull forward.” Netflix ended the quarter with roughly 222 million subscribers, so it’s still the largest streamer — but it’s facing a slew of challenges.
I think the problems at Netflix are twofold: content and a disrespectful tone towards customers. There’s a lot of great streaming services out there competing for your time. HBO Max has become a fierce competitor for Netflix, growing in subscribers and having a lot of high-quality content. Apple TV+ has taken the quality-over-quantity approach, focusing on a few core series that have been popular and then expanding outward, but still keeping things manageable. Throw in other, cheaper services that may bring you in for a series or two like Paramount+, Hulu, Disney+, or Peacock, and there’s a lot of choices other than Netflix.
Netflix has canceled a lot of series that have shown promise and had critical acclaim to the point that I’ve generally gone into a series with the attitude of “don’t get too attached”—the days of House of Cards and Orange is the New Black feel really long ago and instead we’ve had little blips of niche excitement like Squid Game or Bridgerton. Even Stranger Things taking a long break has left a void.
The streaming giant has recently indicated it will tighten the screws on customers who share passwords and login info as it seeks to maximize revenue from the users it already has. And it’s not a small problem: Netflix now estimates that as many as 100 million households are using the service via shared passwords. “It’s harder to grow membership in many markets,” as a result of the situation, Netflix said.
I suspect this will backfire. Netflix already limits the number of concurrent streams, so even if you shared your password with all your friends and extended family, a very finite amount of people can actually use it at once. There’s also the chance that you wouldn’t be able to stream on your own account because others are tying up the allowed streams. That should be the driving force for the freeloaders to get their own account.
Netflix should focus on increasing quality content that people are addicted to so that they will sign up on their own because they can’t stop watching and get sick of the “you’ve maxed out the number of screens” limit. The current casual sharing of passwords happens, but I doubt even half of those would result in new subscribers. Many are probably tuning in to Netflix for a series or two and then leaving it idle while they watch other things. Adding to that, they’ve increased prices to the point that it’s the most expensive of the big streaming services. If that starts leading to more people wondering if they need Netflix (or drop it for a portion of the year), that’s what really should worry their leadership.