Netflix reported a loss of a whopping 200,000 subscribers in Q1 2022 earnings and guided to lose another 2 million in Q2 2022. This is in fact the first time that Netflix reported subscriber loss in a decade and thus a huge business challenge.
Netflix believes that its loss of subscribers can be attributed to various factors, including “password sharing” and increased competition in the streaming industry. To capture lost subscribers and revenue, Netflix told investors that they would take two significant actions:
- Addressing the password sharing issue by adding an additional fee to those who want to share accounts.
- Introducing a lower-priced ad-supported subscription tier in the last three months of the year.
At Premise, we believe that businesses should make data-driven decisions to solve problems and challenges. For this very reason, we surveyed over 1,400 of our Contributors who currently/recently used Netflix to understand their thoughts on the potential changes.
33% of Contributors surveyed use accounts belonging to family and friends, while 67% of the respondents use their own accounts.
Password sharing (by age)
More Contributors from age 18-35 share passwords with others than respondents from age 36 to 65. In other words, it is more common to see password sharing among the younger generations.
Thoughts on additional fees for password sharing
Less than half of respondents (40%) said they would continue to use Netflix while 27% of the respondents said they would want to stop using Netflix altogether.
Ad-supported subscription plans
43% of Contributors are either likely or very likely to switch to a cheaper ad-supported subscription plan.
Lost subscribers – ‘Why did you cancel your Netflix subscription?’
36% of Contributors said they canceled the subscription because they no longer used Netflix. An almost equal 35% of respondents said they canceled the subscription because Netflix is too expensive, which explains the password-sharing problem Netflix is experiencing.
14% of respondents said they canceled the subscription because Netflix does not have the content they want to watch – a clear indication of a need for an updated library of content. 10% of respondents said they canceled the subscription because they used someone else’s account.
Lost subscribers – ‘How long has it been since you’ve canceled Netflix?’
75% of the respondents who are no longer Netflix subscribers canceled their subscription within the past year.
We look forward to continuing to monitor the changes Netflix instills in their subscription plan to alleviate this problem, as well as how other streaming services react to the strategy Netflix uses to win back subscribers.
To learn more, visit www.premise.com.