If you’ve been following Netflix recently, you know that the streamer is in an unstable state right now. antenna Data shows that Netflix confirmed 3.6 million subscription cancellations in Q1 2022, an increase of over 1 million over Q1 2021 and Q4 2021. This is an important indicator that Netflix is gradually losing its number one spot in the streaming war. .
While speculation is being raised as to whether the downfall of Netflix is where the subscription-on-demand (SVOD) industry is peaking and starting to decline, new antenna data supports the opposite.
Antenna found that US subscriptions in the premium SVOD category grew +4.0% quarter-over-quarter and +24.7% year-over-year. The study also shows that in Q1 2022, it lost 37.4 million new SVOD customers and 29.8 million subscribers, leaving a total of 7.7 million new subscribers.
The number 37.4 is in line with the last two quarters, but much higher than in 2019 (pre-Covid-19). Growth was primarily driven by new services Peacock and Paramount+, which added more than 6.1 million US subscribers.
By comparison, in 2019, when the market was dominated by Netflix and Hulu (services like Disney+, Peacock, and HBO Max don’t exist yet), there were a total of 10.3 million subscriptions in the first quarter of this year. The staggering increase represents a three-year compound annual growth rate of 54%.
Current subscriber growth may be high, but cancellation rates are also high. According to Antenna, fewer than 30 million cancellations occurred in the first quarter of 2022, which is 12% higher than any quarter in history, or 4.5 times the number of cancellations three years ago.
No need to worry about cancellations as adding new subscribers indicates that consumers are churning. Also known as churn and return. Paramount+, Peacock and Disney+ accounted for 51% of all new subscriptions in the quarter. Additionally, the three services mentioned accounted for a significant portion of new subscriptions for Netflix users in Q1 2022.
Hub’s Principal, Peter Fondulas decided, “Netflix’s loss of subscribers in the first quarter of 2022 and projected losses in the next quarter represent a small fraction of its global subscriber base. And indeed, at some point, a service as pervasive as Netflix has too much room to grow. It would be a big mistake to take the Netflix experience as a sign that streaming TV services are on the verge of decline, as some analysts have suggested. The appeal of exclusive content and the sheer convenience of on-demand viewing are two powerful forces that should keep these services growing, at least for the short term.”
In the first quarter of 2022, Netflix reported a loss of 200,000 subscribers, the first loss in a decade. Netflix had 221.6 million subscribers, down from 221.8 million in the previous quarter. According to Netflix forecasts, losses will continue and streamers are expected to lose $2 million in Q2.
Subscription cancellations have increased significantly since Netflix raised prices for all plan tiers in the country in January 2022. Netflix US’s monthly active churn rate was just over 2% in January 2019 after raising subscription prices.
Furthermore, antenna Data shows that Netflix’s monthly active churn rate increased by +0.95 pts month-over-month in January 2022, with an active monthly churn rate of 3% due to price increases. By the end of March, Netflix’s monthly active churn rate was 3.3%. This suggests that Netflix’s upcoming low-cost ad-supported tier is the company’s plan to minimize churn.
All this data shows just how volatile the streaming market is. It’s hard to predict which service will take first place next, but incumbent streamers like Netflix will have to step out and come up with new strategies to attract new subscribers.