Netflix Inc. lost almost a million subscribers between April and July.
The streaming giant has seen a massive decline in its subscriber base over the last two quarters. The loss of 970,000 paying customers in the most recent quarter left the company with just shy of 221 million subscribers. However, it is still the biggest streaming service.
To date, Netflix has 220.7 million subscribers. On the other hand, Amazon’s Prime Video is a distant second with 175 million subscribers.
According to reports, Netflix expected an even bigger drop but the Season 4 of ‘Stranger Things’ saved it. The show debuted in two volumes this year and it gripped the subscribers. But still, the subscriber loss is the biggest in the company’s history.
Stranger Things: The lone warrior
When asked what lessened the damage, Reed Hastings told the BBC, “If there was a single thing, we might say Stranger Things.” But even the Duffers Brothers horror show will end one day. The company cannot rely solely on one show to retain its subscribers.
Moreover, the company is hopeful of a recovery going forward on account of certain measures. Some of them are lower-price, ad-supported options for consumers and a crackdown on password-sharing by users.
Netflix has been in hot water financially for quite some time now. The Company reported that about 200,000 subscribers said goodbye to their subscription, back in April. Notably, it was the first time in more than a decade that Netflix lost users, instead of gaining them.
What caused the decline?
Netflix’s troubles really began when big film studios like Disney and Warner Bros decided to jump on the streaming bandwagon with services like Disney+ and Warner Bros. These services began to eat into Netflix’s share. Unlike Netflix, these services come bundled with several decades of legacy content. It includes millions of hours of well-loved, and rewatch-worthy TV shows like Lizzie McGuire (in the case of Disney +) and ‘Friends’ (in the case of HBO Max).
The streaming giant is facing growing competition from rivals. On top of that, a saturated US market and rising inflation are not assisting the company’s case either. Netflix has only new content to rely on. Moreover, in an increasingly crowded space, it has struggled to market and promote its shows and movies.
In a letter to investors on Tuesday, Netflix said it is going to undertake certain moves. They are scheduled to go into effect next year. The executives of the Company said measures like limiting password sharing would have a more immediate impact on revenue than the ad-supported tier of service.