After a protracted reign as the king of streaming, Netflix will have to battle hard to maintain that position.
Between April and July, it lost approximately 1 million members as the rate of service cancellations increased.
But it was less than the streaming juggernaut had anticipated.
When asked what may have prevented more subscriber declines, the company’s CEO, Reed Hastings, responded, “If there was a single item, we might suggest ‘Stranger Things’.”
The wildly successful new season of the popular show may have stopped Netflix subscribers from leaving.
In April, the firm announced its first decline in subscribers since 2011. This news was immediately followed by hundreds of job losses and a dramatic decline in the value of its stock.
While price increases have had a negative impact, rivals are challenging its hegemony.
The company disclosed its largest-ever subscriber losses on Tuesday, with the US and Canada having the most cancellations in the quarter, followed by Europe.
It was “inevitable,” according to Guy Bisson, executive director of Ampere Analysis, that Netflix’s hold on the market would begin to wane.
“There’s only one path to go when you’re the leader,” he added. “Especially when a lot of competition launches, which is what Netflix has seen in the last couple of years.”
It is a significant shift for Netflix, which has experienced years of apparently unstoppable expansion and revolutionized the way people consume entertainment globally.
When the epidemic struck in 2020 and people were stranded at home with few other alternatives for entertainment, they rushed to blockbuster successes like Squid Game and The Crown, solidifying its status as a worldwide powerhouse.
However, when pre-pandemic habits resume, Netflix has found it difficult to retain the allegiance of current subscribers and draw in new ones, particularly as the cost of living issue forces people to cut their budgets.
Intense rivalry exists between the business with services like Apple TV, HBO Max, Amazon Prime, and Disney+. When Netflix first emerged, Blockbuster and other video rental businesses were rendered obsolete. However, the disruptor is quickly turning into the disrupted.
Some users have also been turned off by Netflix’s decision to raise the cost of its subscription.