Netflix could face another massive loss by the end of the year after recently facing its largest drop in subscribers in the company’s history.
Reviews.org surveyed 1,000 American subscribers of the streaming giant last month and found that one out of four Netflix subscribers said they plan on canceling their membership by the end of the year due to the company’s increasing monthly cost — which currently stands at $15.15 per month without ads.
The staggering statistic estimates approximately 18 million users would discontinue their plan, resulting in about $272 million in revenue loss.
According to the survey, Netflix’s basic one-screen plan went up by 11% in January 2022 for the first time in three years, while standard and premium plans increased by 20% and 25% in the same period — making the subscription cost the highest average plan among the top eight streaming service providers in the United States.
Another one out three said they would remove the platform because of the lack of engaging content, while 30% said they prefer other streaming services.
In recent years, Netflix lost some of its licensing of television and movies to other platforms such as Warner Bros. Discovery’s HBO Max, Walt Disney Company’s Disney+, and NBCUniversal’s Peacock.
Earlier this year, Netflix released “better-than-expected” results in its second quarterly report, which showed the streaming service only lost about half of the two million subscribers projected initially earlier this year. However, the report showed approximately 970,000 subscribers canceled their membership during the spring and summer months. The number comes after the service took a massive hit in the first quarter when it lost 200,000 subscribers between January and March.
The company partially blamed the loss of subscribers last quarter on competing with other streaming services and massive account sharing, the war between Russia and Ukraine, and the global recession. At the time, Netflix officials warned shareholders that as the U.S. dollar strengthens and global currencies weaken, the historic pace could disrupt its international market, which makes up about 60% of its revenue.
“We’ve been through hard times before,” the company said in its shareholder letter after releasing the results. “We’ve built this company to be flexible and adaptable, and this will be a great test for us and our high-performance culture.”
Netflix officials added that the service would likely start an ad-tier in a handful of markets where advertising spending is significant.
“Like most of our new initiatives, our intention is to roll it out, listen and learn, and iterate quickly to improve the offering,” the company said.
The New York Times reported a leaked memo from Netflix showed the company could unveil a “cheaper” tier that would be available as early as next month, as low as $7.99 a month.
With Netflix set to release its Q3 financial results next month, the report will show whether or not the company gained or lost more subscribers over the summer.