Netflix's Subscriber Loss Isn't a Real Surprise (If You Look at This)

This week Netflix disclosed that it lost subscribers in Q1 of 2022, the first time that's happened in more than a decade! Netflix lost 200,000 subscribers instead of adding 2.5 million new subscribers, which is what was expected.

Needless to say, the market was surprised, and that surprise cost Netflix's stock, which dropped 35%, losing the company nearly $50 billion of market cap.

But... To those who have been looking at downloads, this was pretty obvious for a while now.

Let me show you.

Back in the day, before streaming was big on mobile, before the days of Disney+ and back when HBO Max was still HBO Now, Netflix was the streamer to downloads.

Sure, you can stream Netflix in a variety of ways that aren't a mobile phone, but mobile has become a very big channel for streaming, so it can't be discounted. Even not back in those days.

Back in 2018, Netflix was averaging 3 million new downloads across the App Store and Google Play in the US, every month, according to our estimates. In 2019, Netflix added 36 million new downloads from the US!

But then Disney+ launched and downloads didn't behave the same way anymore. In 2020, the year that kicked off the race for streaming, Netflix dropped to 32 million downloads in the US. At the same time, Disney+ rose to 30 million downloads in the US, according to our estimates. Almost the same!

Then came HBO Max, a rebrand that launched with great titles and beat both Netflix and Disney+ in the US. By that point, Netflix's downloads were down 22% year over year, down to 25 million for the year.

Needless to say, 2022 isn't looking any better.

What's going on? Disney+ and HBO Max realized something early on, which gave them the lead very quickly. The streaming race is really all about content. Netflix has been investing in content, but overall, I think what's coming from the bigger studios simply attracted more attention. The kind that getting into games didn't solve.

CNN made a somewhat similar mistake with CNN+, but Netflix is in a much different position. Can it become relevant again?