Netflix subscriber declineAlthough the company’s popularity is booming around the world, the United States continues to serve as the most important market. At the end of 2021, the number of paid Netflix subscribers in the U.S. and Canada surpassed 75 million. However, in the first two quarters of 2022, the subscriber count declined below the 74-million-mark as a result of a saturated SVOD market with ever-increasing costs. In order to offset further losses, Netflix announced to introduce a lower-cost ad-supported tier in November 2022, as well as approaches to curb account sharing.
Netflix usersIn addition to its massive user base, Netflix subscribers are quite attached to the service, with nearly one in three U.S. users saying they would not drop the streaming service. Given these staggering numbers, it may seem hard to believe that other companies could make their mark in the subscription video-on-demand market, but Netflix competitors Hulu, Amazon Prime Video, and Disney+ have also carved out significant places within the SVOD landscape. That being said, far fewer people considered to keep the latter if they had to choose.
Market positionOne of the main differences between Netflix and its competitors is its massive wealth of original content. Worldwide, Netflix was estimated to spent around 18 billion U.S. dollars on its content in 2022, a value which is expected to expand in the future. The popularity of shows such as "House of Cards," "Stranger Things," and "Orange is the New Black" have made original programming integral to the company’s continued success. Over half of users from the U.S. stated in a February 2021 survey that the announcement of new exclusive programming was their main reason to subscribe to Netflix, and nearly 50 percent of Netflix subscribers stated that the quality of Netflix original shows and movies are better now than they used to be in the past.
From the beginning, it was Netflix’s ability to adapt to changing technologies and consumer demands which made it so successful. This ability to adjust has continued in recent years with the success of the Netflix’s original content and increased focus on providing (local) content around the world. As long as Netflix can continue this trend of innovation while compensating subscriber losses, the company will remain an important voice in both the SVOD market and the entertainment industry as a whole.