Why Is Netflix Loosing So Many Customers

9 Reasons Why Netflix is Losing So Many Subscribers?

16th October 2023 | 21 Views

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Netflix is by far the most popular name for streaming services. It was the flag bearer of a digital subscription-based model for movies and shows. However, Netflix seems to lose its glory as it struggles to gain new users.

Netflix today is failing; with declining market share, a slowdown in new content production, and a decrease in share price, Netflix’s downfall has started. Let’s see what’s wrong with Netflix and how it can recover.

There are plenty of reasons why Netflix is losing subscribers, such as increased competition, uncompetitive pricing, lack of new content, device restrictions, pricing, etc. Let’s discuss all of them one by one.

Is Netflix Failing?

Yes, Netflix is facing problems that have resulted in rapid downfall. Today, Netflix’s poor decision-making is pushing them closer to bankruptcy. Even though they have a lot of cash and massive cash flow, the unfavorable signs suggest their end is quite close.

Why Netflix is Losing Subscribers?

Netflix is a giant platform that is not slowing down anytime soon. But, there are serious concerns about the future of the streaming giants. It lost about 1 Million subscribers between April to July 2022.

That’s a considerable number. But guess what? There was speculation of an even more significant subscriber base loss. The only silver lining in the current downward trend of Netflix is the success of very few new series.

The reasons for so many Netflix users unsubscribing can be divided into two categories: Losing existing users and the inability to gain new users. We will discuss the possibilities for both tomorrow.

1) Competition

If it wasn’t obvious, Netflix is no longer a monopoly. Netflix’s loss in subscribers came as a result of competition from all directions, from Prime Video, Hulu, Apple TV+, Disney+, and more trying to snatch Netflix’s market share. It’s almost impossible to ignore the variety of options.

Netflix has lost customers because their old users who have already consumed their content find far more new content options on competing platforms. The competitors have far more new content options that they haven’t yet explored.

2) Anti-Consumer Behaviour

To improve cash flow, Netflix has made confusing and contradictory decisions that have reduced confidence in its brand. First, Netflix is failing due to its ban on password sharing among multiple users and family members, resulting in unhappy customers.

Among all big companies, Anti-Competitive behavior is the most common reason for downfall. When we analyzed the downfall of OnePlus, similar reasons for decreasing growth were seen.

To tap into price-sensitive markets in India, Netflix had launched cheaper plans for Indian users. But, later, they constantly kept changing and modifying plan prices and features. This confused Indian users and resulted in Netflix’s failure in India.

3) Pricing

The previous reason explained how Netflix couldn’t retain existing users. This is the reason why Netflix struggles to get sufficient new users. Netflix’s pricing model is highly flawed.

Most people are more confident about buying something if they see a bit of it in advance. Video platforms use three popular approaches:

  • Platforms rely on a wide range of content to lure customers (Like YouTube, Twitch, etc.)
  • Platforms provide some free episodes/content or advertisement-based previews (Like Disney+)
  • Other platforms provide free trials for their content. (Like Amazon Prime)

4) Device Restrictions

In business, giving customers time to think is a crime. That’s especially true when it comes to not-so-necessary purchases like streaming services. Companies want the minimum number of steps to start with different pricing plans,

Netflix has quite complicated device restrictions (relative to other platforms. The picture quality and devices are limited for programs.

This approach makes it a bit complicated for users to understand; they take their time to understand, and that’s a customer loss. 

Device restrictions allow people to think about the right plan for their needs. They end up realizing they probably don’t need it at all.

5) Lack of New Content

This is a big one. To survive in such a volatile space, businesses must keep creating quality content throughout the year. Netflialmost always lags behind its competitors regarding successful new launches.

Not only does Netflix have relatively fewer launches, but the proportion of hit/successful launches is also not very good; Netflix needs a streak of a dozen consecutive hits to become a place for enjoying the best of the best content.

6) Existing Content Removal

This is another major hurdle created due to increased competition. Many major productions that had their shows on Netflix have tried creating their content platforms. Companies like NBC, CBS, AMC, and Disney have plenty of content to make their platform. Long-term fans of their agent have now switched services away from Netflix.

This is a significant issue, as it reduces content at Netflix and increases price ranges in competing services.

7) Lack of International Penetration

Netflix may be mammoth in the USA, but it hasn’t been able to tap global markets like Prime Video and other competitors did. The inability to generate quality content for Asian markets, especially countries like India, has contributed to why Netflix has recently lost so many subscribers.

Netflix could not appeal to audiences outside America nor find sufficient native content to become a viable option for these countries.

8) COVID-19

COVID-19 changed the business landscape, unlike any other event in the past decade. As a result of COVID-19, many businesses had temporary effects. Some industries grew while others shrank due to the Corona Virus Pandemic. Tourism and outdoor sports shrank significantly due to it, whereas OTT and EdTech platforms grew a lot.

But as lives returned to normal after the pandemic, these industries had significant corrections. This correction involved a spike in travel (especially aviation business). At the same time, ED Tech and OTT saw a significant downward trend.

9) Russia Exit

After the start of the Russia-Ukraine war, Netflix also decided to exit Russia by removing its streaming services for Russia. As a result, Netflix lost 500,000+ customers from Russia, creating huge losses and shrinking their business.

Is Netflix Dying? Can Netflix Recover?

As we saw in our analysis of Is Apple Dying, some critical right moves can go a long way in helping companies recover and going back to a positive growth rate.

The recipe to regain subscribers for Netflix is pretty straightforward yet hard to implement. Netflix needs to:

  • Simplify Netflix subscription plans
  • Remove device and streaming quality restrictions
  • Have a very cheap plan for entry-level
  • Create original content that the competition cannot pull out
  • Create/Acquire content to grow in untapped markets like India.

That’s it. It’s pretty easy to create the right subscription plans to ensure that Netflix can regain subscribers. But the arduous task would be to get a lot of quality content for many regions/languages before it’s too late.


So, Why is Netflix losing so many subscribers? Netflix is losing subscribers/customers due to the fierce competition, wrong pricing, and lack of new content. However, Netflix still has more than 200 Million users and is far from the risk of bankruptcy.

However, they need to act fast. Proper, actionable steps taken now can help them maintain their dominance and get back on the right track.

Netflix’s loss of subscribers is proof that no business is safe today. Companies must constantly keep improving themselves in the modern business landscape. 

#Netflix #Business #Loss #OTT #Streaming

Akarshit Mahajan



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