It is being reported that a large chunk of Netflix’ long-term subscribers are cancelling their subscriptions. A report from The Information suggests that as much as 13 percent of cancellations in the last quarter have come from subscribers who have been on the platform for more than three years. The data at the heart of the survey comes from Antenna, an analytics firm that collects data from more than 5 million Americans who share their subscription data anonymously.
This comes shortly after what could be described as the most tumultuous period in Netflix’ recent history. The streaming giant has witnessed subscriber count fall for the first time in its history and the markets have responded with Netflix losing a large chunk of its valuation overnight. Revenue numbers have continued to grow despite the loss in subscribers, an increase in monthly subscription fees adding to the company’s bottom-line. However, many believe that the loss in subscribers could indicate issues that Netflix has been grappling with for quite some time. Most important among them are the emergence of a number of well-funded competitors and Netflix’ recent inability to pull big-ticket shows and movies to its platform. As a result, consumers are now spoilt for choice and Netflix’ steep subscription fee is turning a large chunk of people away. Adding to the company’s woes is its tiny market share in fast growing markets like India – it has to be noted that India is among the few regions where Netflix has slashed subscription prices in a bid to attract more subscribers.
Netflix is reportedly testing an ad-supported tier that will be priced lower and might also disallow password sharing outside the same household – trial runs are already underway in Chile, Costa Rica and Peru. We could see these changes implemented before the end of the year as Netflix tries to prevent its subscribers from leaving the platform while trying to earn more revenue from the ones who decide to stay.