Netflix Q1'22 Retrospective

Netflix Q1'22 results revealed a quarterly net subscriber loss (link). Antenna unpacked some of the latest dynamics around the company in the United States, its most mature market.

In the past six quarters, Netflix Gross Additions have remained fairly stable, ranging from 2.2M to 2.9M. The company raised prices on all of its plan tiers domestically in Jan-22 (link), which led to a jump in Cancels. Antenna data indicates that Netflix saw 3.6M Cancels in Q1'22 — over one million more than the service dealt with in both Q1'21 and Q4'21.

Furthermore, Antenna data indicates that Netflix' Active Monthly Churn Rate increased +0.95pts month-over-month in Jan-22. By the end of Mar-22, Netflix Active Monthly Churn Rate was 3.3%. The last time Antenna saw a similar spike in Netflix Churn was an isolated incident in Sep-20, when the service released the film Cuties to much controversy (Active Monthly Churn reached 3.6% during that period).

Netflix is now exploring lower-priced, ad-supported plans to reignite its subscriber growth (link). Antenna data indicates that ad-supported plan tiers continue to take an increasing share of new Premium SVOD Sign-ups. Below 20% of Total Premium SVOD Sign-ups in 2020 were to an Ad-Supported plan tier. That figure rose to 31% in 2021. In 2022 thus far, 35% of Sign-ups have been to an Ad-Supported plan option.

As a whole, Netflix' performance this quarter suggests increased price sensitivity amongst its subscriber base, likely heightened by the abundance of consumer choice and proliferation of other services. Antenna will continue to closely track the dynamics around the evolving SVOD market.

Brendan Brady is a Content Strategy Associate at Antenna, a measurement and analytics company providing insight into purchase behavior and subscription metrics across the new media landscape.