Two new reports shed more light on why Netflix is now struggling to keep up its subscriber levels.
Declining retention is one factor.
The number of Netflix subscribers who’ve been with the platform for more than three years was up significantly in this year’s first quarter compared with two years ago, according to transactional data from streaming analytics firm Antenna first reported by The Information.
Those longer-term subscribers accounted for 13% of cancellations in Q1. Further, while those who had been subscribers for under a year accounted for 70% of cancellations as of Q2 2021, they accounted for just 60% in this year’s first quarter.
In addition, as reported in April by Digital News Daily, overall cancellations rose to 3.6 million in Q1, versus about 2.5 million in each of the past five quarters, according to Antenna, which derives its data from a panel of 5 million U.S. consumers who have opted in to allow access to anonymized transactions data.
As for underlying reasons for cancellations, a recent survey of 1,000 Americans conducted by internet service provider Windstream finds 39% of respondents expressing unhappiness with Netflix’s latest price increase, and 35% saying they feel the quality of its content has declined.
Starting in Q1, Netflix upped the U.S monthly price for its basic plan by $1, to $9.99; the price for its most popular, standard plan by $1.50, to $15.49; and the price for its premium plan by $2, to $19.99. The company had already upped its standard and premium plan prices by $1 to $2 last October.
The latest increase put the standard plan’s price above the $14.99 price for the HBO Max ad-free plan — previously the industry’s highest, and one that many predicted would prove prohibitive when Max launched in 2020.
In Windstream’s survey, 64% of respondents said that they want to pay no more than $6 to $15 per month for a streaming service, 28% would pay $16 or more, and just 9% would pay more than $20.
Among the 23% who reported having cancelled their Netflix subscriptions, 35% reported switching to Hulu, 22% to Amazon Prime, and 11% to HBO Max.
But there was also ample positive news for Netflix in this poll.
Asked to pick their favorite streaming service, 40% of all respondents picked Netflix, and 63% of subscribers said they still enjoy Netflix’s content offerings.
Nearly three quarters (74%) of Netflix subscribers said they plan to continue with Netflix, even if the service cracks down on password sharing (26% said that would cause them to drop the service).
More than two-thirds (68%) claim to pay for their own Netflix subscriptions.
Interestingly, just 13% of Netflix users admitted to sharing their passwords — far fewer than the nearly 40% of U.S. and Canadian subscribers that Netflix recently cited (30 million subscribers out of 74.58 total North American subscribers in Q1).