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Why Netflix Is Losing Subscribers Revealed By Exclusive Data

Netflix Losing Subscribers Disney Plus

Data revealed exclusively to Screen Rant shows how increased competition in the streaming sector is affecting Netflix. The streaming giant is still the leader of the pack, but it notably lost 130,000 subscribers in the second quarter of 2019. This was Netflix's first loss of subscribers in eight years.

This seems to portend a significant change in the entertainment industry. The last few years have seen a series of price hikes, with Netflix's largest ever increase in January 2019, and it's largely an attempt to pay for the popular Netflix Originals. At the same time, Netflix is growing increasingly ruthless with this original programming, canceling so-called "sleeper" shows like The OA rather than giving them several seasons to flourish. This is believed to be having an unfortunate side-effect, with viewers no longer confident a Netflix Original will be renewed, and thus less inclined to give a new series a try. All these are surely contributory factors, but new data suggests they simply point to a far larger problem for Netflix.

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Related: Why Netflix's Prices Went Up In 2019 (& Why It'll Get Worse)

According to data analytics firm Jumpshot, Netflix's US market share has dropped markedly in recent years. At the beginning of 2018, Netflix's streaming market share stood at 72 percent; by the end of June 2019, it had dropped to 65 percent. The random dropoffs in Netflix's market share correspond to the release of digital originals on other streaming services. For example, the drop off in 2018 during the first week of May (week beginning 4/30/2018) was due to the premiere of Cobra Kai on Youtube Premium. Similarly, the drop off from mid-April to mid-May 2019 was due to the popularity of Game of Thrones Season 8 on HBO. Netflix's market share has climbed back slightly in recent weeks, but it still falls short of the beginning of the year.

Netflix Subscribers Graph

It's hardly a surprise that YouTube's Cobra Kai and HBO's Game of Thrones proved to be a draw to viewers, but what's interesting is that their popularity also had a pronounced impact on Netflix's market share. That suggests the increased competition in the streaming sector is having a profound impact, and supports the notion that Netflix is no longer seen as the default provider for original content. The streaming giant is fighting back the likes of The Umbrella Academy, which became the biggest digital original in February, but their traditional binge model may be backfiring; there have been anecdotal reports of people subscribing in order to watch the latest popular series, and then unsubscribing again once they've finished watching it. Frankly, the best solution for Netflix may well have two strands; to concentrate on strong, high-quality originals, and simultaneously move to a more traditional episode-a-week release schedule in order to keep subscribers engaged in the long term. Netflix is experimenting with weekly releases for some shows, perhaps considering this major change in approach.

Jumpshot's data confirms that original series are key to any streaming platform's success, and the environment is clearly becoming more challenging for Netflix. There are a number of high-profile challengers about to enter the market, most notably Disney+, which will be launched in November. All of these will include digital originals, with Disney intending their shows to have studio budgets, meaning the quality will tend to be high. It will be fascinating to see how this affects Netflix's market share going forward as the streaming wars continue.

More: Exclusive: Amazon's The Boys Is Bigger Than Any Marvel Netflix Show

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