Netflix subscriber decline
Although the company’s popularity is booming around the world, the United States and Canada have long been serving as the most important market for Netflix, amassing over 75 million subscribers at the end of the second quarter of 2023. However, as a result of a saturated SVOD market with ever-increasing costs, the streaming provider has recently struggled to retain customers in this region, outpaced by Europe, Middle East, and Africa (EMEA) in the second half of 2022. In order to offset further losses, Netflix introduced a lower-cost ad-supported tier in November 2022, as well as approaches to curb account sharing in the beginning of 2023.Netflix users
Despite the recent losses in customers, Netflix subscribers are quite attached to the service, with nearly one in three U.S. users saying they would not drop the streaming service. Given these staggering numbers, it may seem hard to believe that other companies could make their mark in the subscription video-on-demand market, but Netflix competitors Hulu, Amazon Prime Video, and Disney+ have also carved out significant places within the SVOD landscape. That being said, far fewer people considered keeping the latter if they had to choose.Market position
One of the main differences between Netflix and its competitors is its massive wealth of original content. Worldwide, Netflix spent around 17 billion U.S. dollars on its content in 2022. The popularity of shows such as "House of Cards," "Stranger Things," and "Orange is the New Black" have made original programming integral to the company’s continued success. However, due to another major problem of subscription-based streaming services to stay or become profitable, Netflix announced, just like other direct-to-consumer businesses, several cost-cutting measures. It not only laid off hundreds of employees in mid-2022, but also canceled several of their own productions after one or two seasons, and faced delays of new content amid the WGA and SAG-AFTRA strikes. Furthermore, to push its users to the more profitable ad-supported tier, Netflix removed the basic subscription ad-free plan for customers in a few countries and will likely increase prices after the strike ends.From the beginning, it was Netflix’s ability to adapt to changing technologies and consumer demands which made it so successful. This ability to adjust has continued in recent years with the success of the Netflix’s original content and increased focus on providing (local) content around the world. As long as Netflix can continue this trend of innovation while compensating subscriber losses and staying profitable, the company will remain an important voice in both the streaming market and the entertainment industry as a whole.
