Netflix loses 126,000 customers after price increase

Streaming giant Netflix has proven its fallibility this week, with reports that 126,000 paid US subscribers abandoned the service during its second quarter. The news marks the first time the firm has lost domestic customers since it launched as a digital platform in 2007.

The company also appears to have overestimated its projections for new subscribers, with the 2.7 million newbies brought in during the April to June period falling short of the initial five million investors were hoping for.

Reasons for subscription cancellations were not made explicitly clear, but the loss coincided with an announcement earlier this year that Netflix was raising its rates by between 13 and 18% (depending on which plan users are signed up to). The increases took effect in March of this year.

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The company’s justification for the rise in price is ostensibly reasonable: unlike Facebook, AirBnB and Uber, Netflix spends vast sums producing, maintaining and upgrading its “product”, namely the reams of original content it puts out on the platform. With high-budget titles like The Crown and Stranger Things on its roster, it’s not hard to see where the cash is going.

And it’s to these titles that Netflix is clinging in times of need; viewers have flocked to the platform to gorge on the new series of Stranger Things, released on 4 July. The streaming giant announced on Twitter that within four days of releasing the new season, 18.4 million households had watched it in its entirety.

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NBC classic Friends has similarly been keeping the punters happy, with Netflix signing a reported $100 million (£80 million) deal to retains its availability for US customers. Meanwhile, hearts are expected to break in early 2020 when the company drops universally adored sitcom The Office from its lineup.

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For now, it seems, former Netflix subscribers have had enough of incrementally rising prices (the firm usually adjusts subscription fees every 18 months), with US users abandoning in the tens of thousands. With the streaming market currently saturated with sub-£10 monthly platforms – think Amazon Prime, Hulu, Hayu and Now TV – Netflix appears to have pushed the frontier of monthly subscription prices a little too far.