Netflix is losing a bunch of subscribers because people are going outside again
The company expects to rebound later in the year as more new shows come out.
The height of the COVID-19 pandemic proved to be beneficial for streaming services like Netflix, as more people than ever were staying at home. Now, some of the Covid restrictions are being lifted and Netflix is beginning to take a hit. The massive streaming platform lost 430,000 subscribers in the US and Canada in the second quarter of 2021, and future numbers aren’t looking as bright as they used to.
According to a new report from Ars Technica, 2021 has not been nearly as successful of a year for Netflix as 2020. In addition to the weak performance in the second quarter of this year, the company has forecasted that it would add 3.5 million subscribers in the third quarter of this year.
While this does seem like an impressive number, it was disappointing to investors who were hoping for a larger bounce back. Some analysts were predicting that the company would add as many as 5.9 million new subscriptions in the quarter.
The streaming landscape has certainly become more competitive over the last couple of years, with Disney+ and HBO Max bursting onto the scene.
Still, Netflix doesn’t believe that this competition is its issue. “Does HBO or Disney… have a differential impact compared to the past? We’re not seeing that in the [data] we have. That gives us comfort.” said Reed Hastings, Netflix co-chief executive, in a call with investors.
So why are Netflix’s numbers lower than expected?
While competition probably does play a minor part in the lowering of Netflix’s overall subscription numbers, it doesn’t look like that is the main cause of these less than stellar forecasts. The more likely reason for Netflix’s current hardships has to do with the pandemic.
According to the article mentioned above, Netflix subscriptions have been hit the hardest in the US and Canada. Unfortunately for the company, those are two of the service’s largest markets. The pandemic, which ultimately led to Netflix’s massive success last year, is likely playing a major role in people leaving the service.
As more and more restrictions are lifted, people are spending less time in their houses. It’s much more difficult to justify Netflix as an expense when you’re not at home to enjoy it.
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Of course, the pandemic can’t be the only reason Netflix isn’t growing exponentially anymore. Some executives have attributed the lack of growth in subscribers to the service not adding massive movies and television shows recently. COVID restrictions certainly made it difficult to produce content for the platform, but that should also change soon.
“COVID and its variants make predicting the future hard, but with productions largely running smoothly so far, we’re optimistic in our ability to deliver a strong second half,” the company said. The service is looking to boost its library in Q3, with new seasons from popular shows like The Witcher and Sex Education.
Netflix has also decided to get into the video game industry. The company recently hired a former EA and Oculus executive Mike Verdu and plans to offer mobile games as part of your Netflix subscription soon.
Despite these lackluster numbers so far in 2021, Netflix remains the absolute top dog of streaming services. The service has more than 209 million subscribers, which is more than double the 104 million subscribers that Disney+ has in second place. Whatever happens with Netflix’s subscriber count over the next few months, I’m confident that the platform will figure out a way to make things work.
- Netflix is getting into gaming and will start with mobile games
- Now anyone can play Microsoft’s xCloud game streaming service on PC and iOS
- TikTok is apparently the most-watched app in the US, beating out YouTube and Netflix
- Snapchat is seeing a huge surge of users as people return to the world