Netflix has proven itself to be one of a kind as an obvious leader in the industry, but the scene has changed a great deal within the last year.
Disney+ (NYSE:DIS) has accumulated more than 60 million subscribers globally since only launching in November 2018, customers have the choice of other services including AT&T’s HBO Max, Apple TV+ as well as Comcast’s Peacock.
As expected, the 2020 pandemic kept more people indoors which meant anything that provided indoor entertainment saw a surge of use; cue Netflix! In real terms, the American technology and media services provider saw more than 25 million new subscribers in just the first 6 months of 2020; almost its total subscriber additions for the duration of 2019.
Investors and critics alike may have anticipated Netflix’s churn to rise as new competition always conveniently pops up to convince their subscribers to switch to them instead but reports show that it hasn’t really been the case.
Some people do like to just stick to what they know. Netflix does not currently report their own churn rate (the measure of the number of individuals or items moving out of a collective group over a specific period.) According to Antenna Data, Netflix’s rate in the U.S. has been significantly lower than those of its streaming peers in recent months.
Statistics show that between July 2018 to July 2020, Netflix’s churn rate wavered between 2% and 3% for pretty much the duration of two years, in fact, during most of these months, Netflix’s churn rate was lower than its competitors including Hulu, Starz, Disney+, HBO Now and CBS All Access.
Hulu’s churn rates kept around 3% between July 2018 and July 2019 but peaked to as high as 11% at Showtime in May 2020 then came the series finale of Homeland. HBO saw a similar, ridiculous spike in churn at HBO when Game of Thrones had finished; many Game of Thrones fans probably don’t want reminding of the last season, but it’s interesting to note how much power consumers have whether they like or dislike their entertainment.
Looking at statistics, it’s important to be mindful of all factors. It’s evident that Netflix is a strong winner because of the platform’s ability to be so accessible to all; they have a lot of content and their frequency is unmatched; that’s what subscribers want; entertainment and options which keeps them consistently on the platform.
Netflix isn’t untouched though, it is said that the platform has seen some elevated churn from their loyal subscribers who signed up for Disney+. This particular group had a churn of roughly 5% quite early on when Disney+ launched. It has dropped since then and apparently wasn’t enough for Netflix to see a massive effect on their churn rate. Unbothered much? Might be worth adding that Netflix made gains of more than 4%, supported by a new overweight rating from KeyBanc.
On the topic of all things online and modern technology, Facebook and Alphabet were both up by roughly 2%. Tesla’s shares jumped 7.2%, continuing on from Monday’s 12.6% rise making this a 5 day run of nothing but gains. This, of course, is following on from Tesla’s sudden drop of 10.9% last week after S&P Dow Jones Indices decided against adding the electric automaker to the S&P 500.