After enjoying a long reign as the king of streaming, Netflix is facing an uphill battle to retain its crown. It lost nearly 1m customers between April and July as dropouts accelerated.
But it wasn’t as much as the streaming giant feared.
Asked whether that could hold off the subscription going forward, the firm’s chief executive, Reed Hastings, said: “If there was one thing, we might call it ‘Stranger Things.”
The new season of the hit drama has been a phenomenal success and may have helped stem the exodus of Netflix subscribers. The company reported its first customer loss since 2011 April, followed by hundreds of job cuts.
Rivals are challenging its dominance, while the price hike has taken its toll. The customer loss recorded on Tuesday was the largest in the firm’s history. The US and Canada saw the most cancellations in the quarter, followed by Europe.
Guy Bison, executive director of Ampere Analysis, said it was “inevitable” that Netflix would begin to see its grip on the market loosen.
“When you’re the leader, there’s only one direction to go, especially when a large number of competition launches, which is what Netflix has seen in the last couple of years,” he said.
It’s a big change for Netflix, which has enjoyed unstoppable growth for years as it revolutionized how people worldwide consume entertainment.
Its position as a global giant was strengthened when the pandemic hit 2020, and people were stuck at home with few other entertainment options, such as squid games and monster hits like The Crown.
But as pre-pandemic habits return, Netflix has struggled to attract new sign-ups and maintain members’ loyalty, especially toward belt-tightening the cost of living crisis takes away.
The company faces stiff competition from Apple TV, HBO Max, Amazon Prime and Disney+. Netflix was once disruptive, making video rental stores like Blockbuster redundant. But the disruptor is becoming increasingly obstructed.
Netflix’s move to make its service more expensive has disappointed some customers.