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Maya Malbon
After adding over 8 million new subscribers during Q3 2023, Netflix is facing potential subscriber losses in the US market. The streaming service raised the prices of its ad-free service last month, causing many US subscribers to start considering a cheaper ad-supported plan or even cancelling their Netflix subscriptions. Data presented by OnlyAccounts.io shows nearly 40 per cent of all US subscribers plan to cancel Netflix due to increased prices.
Nearly two-thirds of US subscribers who are considering either canceling their subscriptions or switching to a cheaper ad-supported plan is something Netflix should take seriously since North America is its second-largest market.
The streaming giant, which lost millions of subscribers in 2022 due to the cost of living crisis, might suffer a similar downturn in users as part of its role in the ongoing dispute between the Writers' Guild of America (WGA) and the Alliance of Motion Picture and Television Producers (AMPTP).
So, how does Netflix factor into all of this? It all started on April 18, with co-CEO Ted Sarandos telling reporters (via Deadline) that studios "don't want" a strike to happen. However, Sarandos also expressed confidence in Netflix being able to ride out any perceived strike (at the time, anyway), saying: "If there is one, we have a large base of upcoming shows and films from around the world. We can probably serve our members better than most."
Understandably, Sarandos' comments weren't received well by WGA members and those standing in solidarity with them. Now, a rumor, which suggests Netflix had a big role to play in the breakdown in talks between the WGA and AMPTP, has only added fuel to the fire.
Tawyna Benavides Bhattacharya, who worked on Netflix's My Life With The Walter Boys, was one of the first WGA members to state they were cancelling all of their streaming subscriptions, including Netflix, until the strike was resolved. Others quickly followed suit, including Bosch writer Dylan Park-Pettiford, voice actor Janine Granda, and Tell Me Lies' scribe Meagan Oppenheimer. A quick Twitter search of the phrase "writers strike cancel" confirms many more (entertainment industry employees and Netflix users) are doing likewise.
This isn't the first time this year that Netflix has faced the prospect of losing users. During its Q1 2023 earnings call, during which Netflix announced its password sharing crackdown plan was actually happening, the streamer confirmed it had suffered a slight downturn in paying customers after rolling out the password crackdown scheme in Latin America. However, Netflix bullishly stated it expects users to reactivate their account, or even sign up for the first time, a few months later, with people worried about missing out on the service's latest big hit.
It's unclear how the Netflix writers' strike rumor will affect its subscriber base. Right now, the amount of people ending their subscriptions appears to be more of a ripple, rather than a tidal wave of cancellations. And, if Netflix is as confident as it proclaims over its forthcoming line-up of movies and TV shows, it'll likely retain the vast majority of its userbase through the ongoing strike.
The problem Netflix might have, though, is if users start getting agitated over the delayed return of its most popular shows. The likes of Stranger Things season 5, Wednesday season 2, The Night Agent season 2, Squid Game season 2, and Arcane season 2 are all in active development. The writers' strike means all WGA members (and those who support the strike) have downed tools on penning scripts for these wildly successful TV series. Incomplete scripts means principal photography on these productions can't begin, thus delaying their releases further.
Regardless of how important Netflix's role in all of this is, there's one thing we can all agree on: employees deserve to be properly compensated for their work. If WGA members don't think they're getting a fair deal, they have the right to strike until a resolution is reached. Over to you, Netflix and company.
Want to know how to cancel your Netflix subscription? Here are the reasons you should (and shouldn't) ditch it in 2023. And, if you're considering whether to leave the service, watch these nine cancelled Netflix shows before you do so.
As TechRadar's senior entertainment reporter, Tom covers all of the latest movies, TV shows, and streaming service news that you need to know about. You'll regularly find him writing about the Marvel Cinematic Universe, Star Wars, Netflix, Prime Video, Disney Plus, and many other topics of interest.
An NCTJ-accredited journalist, Tom also writes reviews, analytical articles, opinion pieces, and interview-led features on the biggest franchises, actors, directors and other industry leaders. You may see his quotes pop up in the odd official Marvel Studios video, too, such as this Moon Knight TV spot.
Away from work, Tom can be found checking out the latest video games, immersing himself in his favorite sporting pastime of football, reading the many unread books on his shelf, staying fit at the gym, and petting every dog he comes across.Got a scoop, interesting story, or an intriguing angle on the latest news in entertainment? Feel free to drop him a line.
This exploration of cancel rates helped form a new hypothesis about how to improve retention. While looking at regional data, we noticed a surprisingly fast improvement in cancel rates in Hawaii. Below, I loosely recreate the data for Hawaii, San Jose, and Boise:
The answer was simple. When we first offered the service in Hawaii, we shipped disks from our Los Angeles hub, and the DVDs took three days to arrive. In August, however, we launched a new DVD-by-mail hub in Honolulu. Disk delivery speed improved from three days to overnight and led to lower cancel rates.
The Hawaii data led us to nation-wide delight through faster DVD delivery. Even better, the expansion of automated operations centers throughout the country improved margin, and the delivery system was extremely hard for Blockbuster to copy. Faster DVD delivery speed achieved the trifecta of delighting customers in hard-to-copy, margin-enhancing ways.
My first year at Netflix presented another challenge. Reed was an aggressive advocate of the hypothesis that unique movie-finding tools would improve retention by helping customers find movies they love. These tools would also improve margin by merchandising titles with lower licensing fees.
In one previews prototype, members arrived at their homepage, and video previews would automatically begin to play. In another, there was a large play button on the movie display page that members clicked to start a preview.
Reed and I talked about these issues, but he did not want to make a decision based on qualitative. The focus groups were composed of a small audience that were likely not representative of our national audience.
In a major move to clamp down on password sharing, Netflix launched its highly anticipated crackdown in Spain in Q1 of 2023. The immediate result was a loss of over 1 million users of the service, causing an instant impact on the company's bottom line.
Netflix hopes that in time, many of these users will return to the service under a paid subscription model, but the current trend shows that this is far from guaranteed. The instant effect is that fewer eyes are on the screen for Netflix, and the company has seen churn almost triple in the quarter compared to the previous period, with close to half of those churning saying they will not pay for the service.
Interestingly, there is no strong demographic skew to those who cancelled, signalling a more outright rejection of the password sharing clampdown. In a worrying sign for the next quarter, 10% of remaining Netflix subscribers say they plan to cancel their plan in Q2 2023, which is well above the average seen in previous quarters.
Sky Showtime, a new entrant to the Spanish subscription-based video on demand (SVoD) market, had a successful launch in a highly competitive environment, capturing almost one in three new subscribers in the first quarter of 2023. Sky Showtime replicated the HBO Max launch offer and offered half-time pricing for life for those who signed up during the launch period, which resonated strongly with consumers, with 69% saying value for money was a key reason to sign up to the new service.
Despite the launch of Sky Showtime, Prime Video just held onto its #1 spot in new subscriber adds, with 34% share. The Lord of The Rings, the Rings of Power continued as the top title driving sign ups to Prime Video in Q1 2023, an uninterrupted run of 9 months, signalling enduring pay back from the budget busting title.
Two out of the top five most enjoyed SVoD series in Q1 were Spanish titles, with La chica de nieve at #2 and Entrevas at #4. Both titles were on Netflix, indicating Netflix's investment in Spanish language content.
I called in for the third time about this change and asked for a Supervisor to discuss it. I finally got through to a Supervisor, who looked up my account and she said that as I am on the Magenta Max 55+ with 3 lines, my Netflix service is grandfathered in and will not be changed to the one with ads. I asked her to confirm and she put me on hold, came back a couple minutes later and confirmed no change to my Netflix. As this is different from what I was told the last 2 times I called, I supposed I will see what happens over the next day or two when the change is taking place.
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