Netflix posted a big earnings miss yesterday as it reported that it lost 200,000 subscribers in the January to March quarterly window, the opposite of the constant growth it wants to see. That was actually more pronounced in the US and Canada where it lost 640,000 subscribers in the quarter, offset by gains in the Asia Pacific market. Wall Street analysts can parse their own reasons for these losses, but if you’ve used the service and its competitors recently, you’ll know that the answer is pretty clear.
Netflix is Too Expensive
Like a frog boiling in water, Netflix has been constantly increasing its prices over the years to the point where its “premium” subscription, which offers four screens of play, a must for many families, and 4K content, is $20 a month.
That’s higher than any of its rivals by a significant margin. Such as:
- Disney Plus – $8 a month
- Apple TV+ – $5 a month
- Hulu (No Ads) – $13 a month
- HBO Max (No Ads) – $15 a month
- Amazon Prime Video – $9 a month
- Paramount Plus (No Ads) – $10 a month
The “mid tier” of Netflix is $15 a month, but that knocks out 4K content, which many of these others have, and takes you down to just two simultaneous screens. “Basic” at $10 a month doesn’t even have HD content, which is a setting that doesn’t even make sense in 2022.
Netflix absolutely has the numbers and market share advantage here. Even with the unexpected loss, they still have 221.6 million worldwide subscribers, with about 75 million in the US and Canada. That is still far more than rivals have reported. Hulu has 45.3 million while HBO and HBO Max have 46.8 million subscribers. Disney Plus has 42.9 million subscribers in the US and Canada. Paramount Plus has 32.8 million subscribers. Apple, on the rise with arguably the highest quality content lately, has only 8.1 million subscribers via the last analyst estimates.
So, Netflix is too expensive, and that’s allowed their rivals to gain ground. But also…
Netflix Has Worse Content
Look, no one will dispute that Netflix doesn’t have more content than all its rivals. They’ll say that’s what you’re paying for with the higher price. And yet if you’re looking for culturally relevant and critic/audience beloved series, Netflix often seems to have worse offerings than its rivals. Here’s a comparison I made the other week about 2022 offerings from three of the big streamers, including Netflix:
HBO Max (which includes HBO): Peacemaker, Julia, Minx, The Gilded Age, Tokyo Vice, Euphoria, Our Flag Means Death, Raised by Wolves
Apple TV Plus: Severance, Pachinko, Slow Horses, The Afterparty, Servant, Roar
Netflix: Inventing Anna, Pieces of Her, Bridgerton, Vikings Valhalla, Archive 81, In From the Cold, Anatomy of a Scandal
Not that Netflix has no good shows, but you are paying for a whole lot of poor quality offerings in the general pool, whereas practically every single thing Apple is putting out these days is solid, and it costs 25% as much as Netflix. So what are you paying for, really?
Other streamers are doing more with less. Disney Plus has a pretty severe lack of adult content, and yet they are dominating cultural conversation year-round with whatever Marvel or Star Wars show is airing (Moon Knight, at the moment), where Netflix can throw $100 million at a season of The Witcher and because of its binge releasing, no one’s talking about it by the following Tuesday. Another aspect to consider.
Netflix has issues. But they’re obvious. Can they fix them? That’s the real question.