Where next for Netflix shares as 25% of subscribers poised to quit?
A survey from Reviews.org, which featured 1000 Americans, found that as many as 1 in 4 US subscribers may quit the service in the next year.
There was an interesting breakdown, but the main reason was affordability. Only 18% said they would move to a cheaper competitor. IGTV’s Jeremy Naylor looks at the numbers.
(Video Transcript)
Netflix subscription woes
Netflix Inc (All Sessions) could be in for a rough time ahead over the next 12 months if a new survey is anything to go by, which was conducted in the US.
Out of the 1,000 adults that took part in this survey undertaken by Reviews.org, around 25% of those that were covered said that they would be cancelling their Netflix subscription within the next 12 months.
Now, it says with that 25% of US subscribers to Netflix considering leaving, not to join a competitor, but mostly because of pressures on household bills.
This is how it is split:
- rising cost of subscriptions - 40%
- inflation - 20%
- a lack of content - 22%
- spending more time on the services of others - 18%
So you can see, a minority said they were going to other services, such as those provided by Disney Plus or Amazon Prime.
The cost of Netflix has risen dramatically this year as its basic plan increased by 11% in January and its other plans by 20% to 25%. Now these were the first price increases for three years, so that itself is relatively new for a lot of subscribers.
Netflix share price
Let's take a look at the Netflix share price.
You can see on the far left hand side of this chart the COVID lows at $290.39. We saw a whacking great increase there of 141% to the top and the record high in Netflix shares back in November 2021. And that was when subscriptions were rising, people were paying more for their services, and it was all humming beautifully.
And then all of a sudden people started questioning the numbers of streaming services they were undertaking with some deciding to withdraw from Netflix. All of a sudden the big drops started coming through with profit warnings and sales warnings.
We've recently hit a new low of $162.50. Since then there has been a little bit of an increase. We're currently trading at $232.75, but we are down by a margin of 1.75% in today's session, which reflects this news that we could well see a relatively large drop in subscribers for Netflix in the US within the next 12 months.
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