When Netflix revealed last month that it was losing customers for the first time in a decade, you might have expected the competing streaming service to be ecstatic.
In recent years, the old media giants have made it a mission to challenge Netflix. The numbers for the first quarter suggest they’ve had some success: Netflix lost 200,000 subscribers, while Disney Plus added nearly 8 million new subscribers.
Even Netflix co-founder Reed Hastings, who for years denied rival services posed a threat, admitted that they have “some really good shows and movies.”
But data from Ampere Analysis suggests that it wasn’t Pixar’s new movie or HBO show that drew viewers, but the pressure on consumer wallets that was the key to Netflix’s troubled quarter.
According to an analysis based on roughly 3 million U.S. Internet users, 87% of users did not sign up for a competitor’s service within two weeks of canceling their Netflix subscription.
Richard Broughton, head of research at Ampere, said that despite an increase in churn at the beginning of the year, “there is no strong evidence that customers are being pulled away by interest in other areas. [streaming video] Serve”.
The data showed that rising inflation and a weak stock market prompted consumers to tighten their budgets.
The analysis showed that many of those leaving streaming services were between the ages of 18 and 24 or had a household income of less than $15,000 a year. About 49 percent of the poorest households surveyed said they subscribed to Netflix in the first quarter, down from about 56.2 percent last year.
The churn comes after Netflix raised the price of its Standard plan in the US by $1.50 to $15.49 in January.
While analysis suggests that belt tightening is the biggest drag on Netflix, skepticism about its content may also have contributed.
Ampere’s data shows that Netflix is suffering from a growing number of fickle subscribers, or those who unsubscribe if they can’t find something they want to watch, but are willing to join again when they hear what they do people.
Despite the industry-wide concern, Netflix’s maturity makes it more vulnerable than other companies to that risk, Broughton said.
Additional reporting and data visualization by Steven Bernard