Netflix is now having its most challenging period since its inception in 1997. Netflix is experiencing a sharp decline in new subscriptions and is losing long-term members as streaming providers and technologies compete with one another.
Instead of showing progress, the predictions and calculations showed even a worst-case scenario. In the first quarter of 2022, the American streaming service lost around 200,000 subscribers. More than 2 million Netflix members are anticipated to leave the service in the upcoming quarter. The Information reported that over 13% of people had canceled their Netflix subscription for a period longer than three years. This is a very worrying situation for Netflix.
The big profit of Netflix’s streaming service may be in jeopardy due to the steadily rising number of subscription cancellations. Netflix stock is showing signs of grave danger. It is currently down around 25%. Let’s find out why long-time Netflix users quit their subscriptions.
- High Costs For A Netflix Subscription
Who would want to use a Netflix subscription to view the Netflix Shows that are available elsewhere online streaming for a lower price? Simple: Everyone on the globe would love to take advantage of high-quality services at a lesser cost. When Netflix’s subscription fees skyrocketed, viewers would stop relying solely on the Netflix streaming service and look for other sources of entertainment.
Hulu is an online streaming service similar to Netflix. It charges less money than Netflix. In addition, the cost of a monthly subscription is $6.99. While Netflix charges a higher monthly fee, i.e., $9.99, which is more than Hulu. Long-time Netflix members are also discontinuing their subscriptions due to the price increase.
- Advertisement-Supported Less Expensive Netflix Membership
One of the scariest things that Netflix will do is offer a less expensive, ad-supported version of their service. Compared to the current ad-free Netflix edition, this ad-supported Netflix will be less expensive.
According to Reed Hastings, Chief Executive Officer of Netflix, the business does not need this ad-supported version. Because it can reduce Netflix’s effectiveness compared to other streaming services like Disney, Peacock, Hulu, and others, these changes are expected to occur by the end of this or next year.
- Netflix Cancels Shows
Netflix offers a personalized list of anime series, TV shows, and movies displayed by the online streaming service. When Netflix discontinues a specific show, the fans can often become upset. Many subscribers are terminating their memberships because of Netflix shows cancellations. Recently, Netflix stopped several of its most popular shows, including Archive 81 and others.
Netflix subscribers are resentful of these sudden cancellations. It makes them feel bad, so they switch to another online streaming provider. Most Netflix shows are available on Peacock, Hulu, and other internet sources. This is one of the major reasons for Netflix Subscription cancellations.
- Netflix Has Discontinued Its Services In Russia
Netflix was once the king of internet video streaming services. Through a cinematic experience that was captivating and entertaining, it entertained millions of viewers all over the globe. But, Netflix is having a tough year in 2022 because it is losing long-term customers rapidly. For the first time in a decade, Netflix lost 200,000 subscribers in the first quarter of 2022, which was a devastating blow. In addition, Netflix will likely lose another 2 million customers in the second quarter of 2022.
Netflix’s decreasing reputation is due to a variety of factors. Many hurdles and issues have hampered Netflix’s success. Russia recently launched a special operation at the direction of Vladimir Putin, President of Russia. To show its support for Ukraine, the United States imposed harsh sanctions on Russia and attempted to limit its power as much as possible.
Netflix joined in on this high-pressure strategy, suspending all services in Russia. As a result, Netflix has lost around 1 million Russian subscribers. Netflix hiked subscription costs to compensate for the massive loss, which resulted in even more Netflix subscription cancellations.
Conclusion
Netflix has also begun to penalize users who share their accounts with others. This was also a threat as it could lead to increased Netflix Subscription cancellations. On the other hand, Netflix is aware of its actions and is working hard to limit them.
To compete with rival online streaming services, Netflix must do more to maintain its subscriber base. Netflix launched a trial feature in Peru, Costa Rica, and Chile. Netflix subscribers can create “sub accounts” for any service user not belonging to their household. Additionally, Netflix is working on Live Streaming.
ABOUT AUTHOR
Over 4 years’ experience in the research industry. Experience with research and consulting projects, catering to domains such as ICT, Health & Pharma, and packaging. Managed projects on both B2B as well as B2C perspectives, which includes consumer preference analysis, interviews with key executives, etc
