Even long-time Netflix lovers are taking a break and hitting pause as they cancel their subscriptions. Or so says new data that shows how Netflix's cancelation problem is worse than it previously was. And this new data also points to which competitors may be pulling Netflix subscribers who can't afford all of the best streaming services.
Research firm Antenna (via The Information (opens in new tab)) data showing how the core Netflix users — folks who had paid for Netflix for over three years — are becoming a larger part of the ever-increasing number of folks who cancel Netflix. The data is pulled from "a panel of 5 million Americans who anonymously contribute details of their subscription transaction history."
At the start of 2020, only 5% of those canceling Netflix had been with the service for over three years. That number doubled to 10% of cancelations at Q1 2021, which is an interesting data point. Q1 2021 quarter saw more long-term subscribers (those who had been with Netflix for 2+ years) cancel than a year ago, while those who were newer to Netflix (subscribing for less than 1 year) accounted for 65% of the cancelations, down from 69% in 2020. Overall, the story got worse for Netflix, as it saw 2.5 million subscribers cancel that quarter, as opposed to 2.1 million a year before.
Of course, though, we're all more focused on the Q1 2022 numbers, as that was where Netflix saw its first overall loss of subscribers. And in that quarter — where Netflix lost a total of 3.6 million subscribers total — the over-three-years crowd had grown to account for 13% of those canceling.
As you might have expected, the recent Netflix price hike is definitely a part of the problem. It hit Netflix's existing subscribers in February and April, and Antenna's data shows "In April, Netflix lost 612,000 subscribers while the rest of the streaming market gained 571,000," which shows how the price hike was likely a contributing factor.
In that quarter, the percentage of recent subscribers (less than a year) who abandoned ship were less than in either of the previous years at 60% — but the overall count is still higher, coming in at over 2 million cancelations for the first time. For those keeping track at home, this previous quarter saw the most cancelations since mid-2020, where 2.8 million bowed out.
Of course, newer subscribers still make up the bulk of Netflix cancelations, which may be showing how users are canceling and later coming back (churning) when new, awaited content is available. Netflix likely hopes that Stranger Things season 4 and Umbrella Academy season 3 will bring more users back, but how it keeps them paying after those seasons air is another story.
Analysis: Why Netflix's competitors are pulling subscribers away
Antenna's data also revealed that Peacock (which launched in the summer of 2020) and Paramount Plus (which arrived in March 2021) and Disney Plus were the most popular options in the first four months of 2022 when it came to "services Netflix subscribers sign up for as additional streaming options."
While the ever-increasing numbers of cancelations may be tied to an overall more-competitive landscape since Disney Plus and Apple TV Plus launched in 2019, Peacock and Paramount Plus provide a more-interesting alternative for a couple of reasons. For starters, their $4.99 per month ad-supported tiers are far more affordable than the $15.49 per month Netflix Standard package. The popularity of these more-affordable services is likely one factor playing into the upcoming ad-supported Netflix tier.
But there's one thing that Peacock and Paramount Plus have that Netflix doesn't: live events. Peacock streamed the Super Bowl and the 2022 Olympic Games on its $4.99 per month ad-supported tier, which also has WWE live events. Paramount Plus' $5 ad-supported option also includes NFL on CBS and UEFA Champions League streams, and it will throw in local live CBS stations if you bump up to its $9.99 per month Premium plan. Netflix is seemingly aware of this, as it's confirmed that it's looking into live streams.
As someone who subscribes to Peacock solely for WWE, I can say that an exclusive deal for specific live events is a fantastic way to pull subscribers in. I have a spreadsheet where I keep track of my own streaming subscriptions, and I list Peacock as "never canceling unless the WWE deal ends."
In other Netflix news, Stranger Things season 4 spoilers caused a 'total meltdown.' Looking for something new to watch? Check out the new shows and movies to watch this weekend and the one Apple TV Plus show you should binge-watch — as its second season is about to start.