Also plaguing the service, analysts say, is a lack of must-see content. While Netflix used to be the first stop for consumers, recent offerings like “Severance” from Apple TV, “The Dropout” on Hulu and “The Gilded Age” on HBO Max have prompted consumers to go where the hits are rather than stick with their first streaming subscription.
According to a recent survey from Deloitte, subscriber churn in the United States is at 37 percent, with consumers canceling their services because of cost issues and lack of new content.
To Raj Shah, an analyst at the digital consultancy firm Publicis Sapient, this behavior wasn’t surprising. “One-off hits like ‘Bridgerton’ are not enough to keep subscribers hooked,” he said in an email. “It is going to need a string of well-timed, well-liked, must-see programming to attract and hold onto customers.”
In the earnings interview, Ted Sarandos, the other co-chief executive, pointed to the new season of “Stranger Things” and the final installment of “Ozark” as must-see content along with films like the sequel to “Knives Out” and “The Gray Man,” a new action film from the filmmakers behind “The Avengers,” starring Ryan Gosling.
The company lost 600,000 subscribers in the United States and Canada, which it attributed primarily to its most recent price increase. Asia was the one region that showed growth, with Japan, India and the Philippines among the countries adding subscribers.
The company said it intended to jump-start its revenue growth by improving all of Netflix, specifically “the quality of our programming and recommendations, which is what our members value most.” The company also said it would “double down on story development and creative excellence” and pointed to recent successes, including two shows created by Shonda Rhimes — the second season of “Bridgerton,” which generated 627 million viewed hours, and “Inventing Anna,” with 512 million viewed hours — as well as the family adventure film, “The Adam Project,” starring Ryan Reynolds, which was viewed for 233 million hours.
On the product side, Netflix said the introduction of the “double thumbs up” button, which allows viewers to “express what they truly love,” should help the company improve its personalized recommendations for the consumer.