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Netflix is ​​struggling to keep its newest subscribers

Netflix spends around $17 billion a year on new TV shows and movies. But its newest customers don’t think they’re getting their money’s worth: New data shows that Netflix subscribers are more likely to bail on the subscription service in the first month than are subscribers of any of its streaming competitors.

That’s a new development, and it syncs with Netflix’s stunning news this spring it lost 200,000 subscribers in the first three months of the year, and expects to lose another 2 million in the second quarter of the year.

Those are the first subscriber losses the company has posted in a decade, and the results have led to a huge drop in its stock price, a scramble to find answers, and a fair degree of schadenfreude.

The data that suggests what kind of problem Netflix is ​​facing comes to Recode via Antenna, a research service that tracks consumer spending on subscription services. And it shows that by the end of April, 23 percent of Americans who signed up for Netflix had dropped the service within a month. That’s more new subscriber cancellations than any other competitive service Antenna tracks — including the likes of Apple TV+ and HBO Max, which used to have higher early churn numbers but have recently improved them.

Antenna says its data comes from a panel of 5 million American consumers; the numbers don’t include free trials, or bundles and special offers like the one Verizon and Disney have done in the past.

We still don’t know why Netflix subscribers are becoming Netflix cancellers, and there could be several reasons. It could be because of the company’s newest price hike, which went into effect early this year — at the same time that new subscribers began to churn out at a higher rate. It could be that after signing up to stream a specific new show or movie, customers looked around and couldn’t find other stuff they wanted to watch — or, at least pay for. It could be that they prefer Netflix rivals like Disney+ or HBOMax. Perhaps all of the above.

But it’s certainly worrisome for Netflix, which used to offer subscribers a huge swath of Big Media’s best movies and TV shows, because Big Media wasn’t paying attention to streaming. That’s over now, and some of the best-performing stuff that used to be on Netflix — TV shows like The Office swear Friends; movies like Disney’s Marvel franchise — are now on competitors’ platforms.

So Netflix’s response includes a move to offer a cheaper version of the service with adsand an admission that it has to get better at the programming it makes for itself.

It also appears to be intentionally backtracking on its initial pledge to let viewers watch an entire season of a show at once. Instead, in the case of a few high-profile shows, like Ozark, it has released the newest season in two chunks, spaced months apart. It’s doing the same thing for the new season Stranger Things: The first seven episodes came out on May 27, but the last two won’t come out until this Friday, July 1.

That is: If you want to see all of Stranger Things season 4 right away, you need to subscribe to Netflix for at least two months, and likely for three. You can see the logic for that in the chart of Antenna data below, which tracks the churn of video subscribers who have signed up in the last three months. In this one, you can see that Netflix performs in the middle of the pack of its peers, which tend to release one new episode of a hit show every week. If Netflix can hang onto subscribers for a little bit, its relative performance improves.

Netflix subscribers who signed up in the last 3 months are more likely to quit than in the past

A Netflix rep declined to comment on Antenna’s data, but pointed me to the company’s commentary in its April earnings callwhere it acknowledged “slight elevated churn” — but also said that its ability to hang on to customers “remains at a very healthy level.”

The best news for Netflix, which still has some 220 million subscribers — much more than any competitor — is that the longer someone subscribes to Netflix, the more likely they are to keep subscribing. The company’s lifetime churn rate remains better than anyone else — though it has gone up in recent months as well:

Netflix's overall subscriber base is more likely to quit than in the past — but less likely than the competition

But hanging on to older subscribers won’t help Netflix that much if it can’t keep its new ones. And it needs new ones to keep investors at bay. Netflix was worth nearly $300 billion last fall; now it’s worth $84 billion, and that number could keep falling if Wall Street thinks its growth days are over. There’s no single magic bullet for that, and the task may get even tougher if a recession forces consumers to cut back on entertainment spending — and perhaps spend more time watching free entertainment options like TikTok.

One of the reasons it’s fun to write about Netflix is ​​that everyone’s a Netflix expert, because everyone uses Netflix. So: What are you seeing? Are you sticking with Netflix? Have you swapped it out for something else? If you’ve dropped it, what would you need to come back? Drop me a line at and let me know.

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