Netflix has been dominating media news with the recent reports of its first subscriber loss in more than a decade, dropping 200K in the first quarter of 2022, followed by a significant stock price drop.  Netflix has partially blamed the decline in numbers on people sharing their passwords for the service. They are in the process of launching new features to address this. Most notably, requiring those sharing passwords to add these households to their plan at an increased price. This solution may be a viable one, but according to CivicScience data, 73% of streaming consumers say they would likely cancel their subscription if they were charged more for sharing their account. 

The industry pioneer is also planning to launch a cheaper ad-supported plan. Our data suggest that 13% of consumers who don’t currently use Netflix would likely sign up if provided this offer. Albeit, 17% of users paying full price would switch to the lower-priced version. Time will tell if either solution will stop the downward trajectory.

While this may seem like a Netflix problem, the media mogul’s issues presumably indicate a more significant market shift. The industry is becoming increasingly fragmented. Understanding those unsubscribing to Netflix may shed light on consumer expectations and create opportunities for streaming services.

First and foremost, content is key.  

Not surprising, but still worth mentioning.  When looking at Netflix unsubscribers, they are much less interested in original content, which Netflix prides itself on.  They are more interested in syndicated TV shows and Hollywood movies than current subscribers.  

Interestingly, more than a third of unsubscribers are cord-cutters that are now either on the fence or regretting this decision.  Seeing their higher interest in live TV, that makes sense.  Yet, it doesn’t appear that they are streaming less overall.  Forty-three percent say streaming is the primary way they watch TV, up eight percentage points from last month. Suggesting they may be shifting their viewing to a streaming platform that provides more of a live TV experience.

Furthermore, they are still subscribing to multiple streaming services. In fact, over a third (35%) that used to subscribe to Netflix still use three or more streaming providers.

Netflix still dominates the market, but competition is intensifying.

It’s important to note that Netflix is still the leader among streaming providers. Over half of U.S. adults use it and like it. Yet, cancellation rates are higher, and intent to subscribe is lower.  With awareness at nearly 100%, attracting new customers may prove difficult, even with lower-priced options. As the market becomes more fragmented, competition among providers will only become more fierce.

Self-Reported Streaming Platform Usage Among U.S. Adults:

Q1 2022
Netflix
Disney+		Apple TV+
Paramount+		Amazon Prime VideoYouTube PremiumHBO Max
Hulu
Peacock
I use it, and I like it51%29%14%19%41%18%23%31%20%
I use it, but may not keep it14%12%10%12%14%8%11%12%12%
I used to use it,
but stopped/cancelled		13%10%9%10%9%8%11%11%9%
I haven’t used it, but plan to4%6%7%8%6%6%6%6%8%
I haven’t used it,
and I’m not interested		15%35%49%35%23%46%39%32%35%
I haven’t heard of this3%8%11%16%7%14%9%8%16%
Total Response Count71,47469,80468,93768,96968,52569,00015,37568,75169,506
*The above table is looking at self-identified users, not household subscription counts
So, who are these consumers?

We know they tend to be younger and more diverse, 43% are 18-34, and 44% are non-white. Being younger, they are also less likely to be parents or married. Re-engaging this audience could be an opportunity for Netflix, or maybe they will subscribe again once they reach the family life stage.  As rapidly as things are moving, there will surely be many options to choose from. So, while it is Netflix now, this is undoubtedly a problem many will face in the future.  

Want to know more about who subscribes, cancels, or intends to subscribe to any of the current streaming providers? Contact us.  We can help!