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Opinion: why Netflix is losing customers

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Profile photo of Faye Lipson Faye Lipson Senior Researcher/Writer
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Streaming giant Netflix is having a tough time. I think its once-innovative algorithm is to blame. Do you agree?

This is an opinion piece. All views expressed are not necessarily shared by Which?.

What’s the problem with Netflix? In April, it announced it had lost 200,000 subscribers in the first three months of 2022 and feared it could lose another two million by the summer.

There are lots of theories about why: too expensive, not enough good programmes to watch, too many rival services. Netflix’s own analysis points the finger at the one in four of its customers who share their passwords with friends and family in other households.

The sharing of a friend or family member’s account has been widespread enough for long enough that it’s spawned numerous memes and in-jokes across the internet. I confess that I too benefit from one such generous acquaintance – who will remain nameless.

It’s likely that Netflix will begin to clamp down on this practice soon in the hope that freeloaders such as me will pay to regain access.

‘I watch it because it’s there’

Will I? Unlikely. I cancelled my own paid subscription some time ago because it bored me. Netflix has become a grim, mindless habit. I watch it because it’s there; navigating to and around the app is now part of my muscle memory in the same manner as changing a bin liner.

The algorithm which once broadened my horizons by plucking an eclectic range of films, documentaries and drama from the ether, now predictably appeals to my basest interests, cranking out endless murder and scammer documentaries; most recently The Tinder Swindler, The John Wayne Gacy Tapes and the histrionically named Trust No One: The Hunt for the Crypto King.

Its documentaries are artificially bloated into series characterised by poor editing, cheap twists and overblown narratives. I suspect the aim is increasing viewing time metrics rather than deft journalistic handling of complex stories.

‘You will like what you already like’

The technology underpinning the service operates on a crude assumption: ‘You will like what you already like.’

This is a sorry state for a streaming service that in 2013 genuinely pushed the boundaries by being the first to launch its own original programming.

Are you a Netflix subscriber? Or did you used to have it but give it up? Do you feel like it’s gone downhill? Let me know in the comments.

This was an opinion piece. All views expressed were not necessarily shared by Which?.

Comments
13
malcolm r says:
30 May 2022

Declaration of (dis)interest – I don’t subscribe to any streaming services. The squeeze will, no doubt, make many others think about spending their money in more essential ways. But I think ”I watch it because it’s there; ” sums up all television. There are far too many channels/programmes, mostly poor quality, sustained by advertising because we watch them mindlessly.

There is, of course, good stuff worth watching f you are selective and winkle it out. The tv guide should grade the quality of programmes and allow you to select only the best.

I have, of course, individual tastes that differ from others. I am not a football fan and wonder why it occupies so much broadcast time and even takes over the news – as if the Liverpool Real Madrid game of football was of overriding importance. I also am not a fan of much pop music and wonder why so much low quality stuff is pumped out. I do like to see classical music performed on tv but struggle to find any, except on rare occasions like the Proms, Leeds Piano Competition, young musician of the year and occasional appearances on BBCs 2 and 4. Does Netflix offer any of that?

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pamela sala newport says:
10 June 2022

I love Opera and Classical music however we do not often get any all only for those who like pop music
. I also like modern music not that which for many of us is just a noise

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John Ward says:
10 June 2022

I think the problem with opera, in particular, is that it is quite difficult to televise successfully in a stage production since the camera lens, usually from a position well back in the auditorium, does not convey the depth of the stage easily and the action looks very compressed. A studio production is much better where more space is available, where camera positions can be much more varied, and where close action camera work can be achieved. Additionally, a studio production can provide much better sets and staging opportunities whereas theatre or opera house productions have considerable limitations and less effective special effects. Studio productions of even the most popular operas are, however, expensive to produce and still do not guarantee a big audience.

I feel that classical music gets a fair airing on terrestrial TV and there is a wealth of material available on YouTube. Music does not require the same televisual techniques as opera to make it enjoyable.

One thing I would say is that excerpts from operatic scores should feature more in orchestral concerts; all we get is the occasional overture and a handful of well-known arias. The music on its own without the vocals is often rich and highly enjoyable [as the advertising industry long ago discovered].

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John Ward says:
30 May 2022

We feel that if we subscribed to a streaming service we would waste even more time watching television. Some days, like the weekend just gone, we don’t see anything on TV. Most evenings we don’t switch it on until eight o’clock or later and we never watch anything in the mornings or afternoons. Anything we like on a commercial channel we record so that we can see it without watching the advertisements. We no longer watch the TV News because we don’t like it and we have better things to do than watch box sets on the trot.

Friends say there are some good dramas and films on Netflix and Amazon Prime Video, but they don’t appeal. In the days before streaming, we never patronised Blockbuster or any other outlet for videos and, just because they can come straight to the home digitally, does not mean we shall be changing our habits. There is nothing worth than consuming rubbish just to extract some value from the subscription.

I should think a good third of the population are abstainers from Netflix et al and probably won’t sign up unless other channels and forms of entertainment disappear, so Netflix has a mountain to climb to recapture its audience. Password sharing has lost it a lot of revenue but in consumers’ eyes it has probably made the service affordable [on an average cost basis]. Preventing the sharing of passwords is unlikely to attract more customers unless there is a price reduction and raising the price but leaving viewers free to share could be commercially unsustainable.

From a distribution point of view, the marginal costs of delivering to a larger audience are next to nothing but in terms of content they need continued growth to maintain high production values, big names and popular but expensive genres and features in order to maintain their market position, because, if those standards decline, their customer base will leave in droves. I suspect many viewers are going through the same thought processes as Faye is and finding the service is no longer compelling, if not bordering on boring and unnecessary.

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Brian St. Pierre says:
3 June 2022

Aside from the difficulty in navigating the site when you’re browsing–I almost never want anything the algorithm chooses, but get a lot of chep clutter, there’s the simple matter of what’s on. I made a long list of movies I want to see, and then searched, on Justwatch, for where they’re streaming. Netflix came in last. Not a leader any more.

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Leon Williams says:
3 June 2022

I agree that Netflix is offering less, but we still value it for its wide range of international films and series. We have watched top-quality productions from Argentina, Turkey, Belgium, Poland, and many other counties including, of course, US and UK.
There is still a very large proportion of the programmes on offer that do not come up to our viewing standards, but that applies to terrestrial TV and the other subscription channels. Really good productions can be enjoyed just as much in a second viewing as in the first, so Netflix will never become a desert waste.
It has served us well, and we are sticking with it.

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Paul says:
3 June 2022

There are a few good things on Netflix which we enjoy. However most of what I watch is recorded from Freeview or streamed from Iplayer.
The main difficulty I Have with Netflix is that if I am in the mood ans have the time to watch a feature film rather than a serialised production, and there isn’t one I fancy in my recorded library or on Iplayer, then unless there is one on Netflix that I know I want to see, its difficult to search for something new. Too often the synopsis shown by Netflix is limited to information such as the title, genre, director and starring actors with no indication at all of the type of plot.
Too often I have had to abandon a film which at first sight seemed potentially worth watching because I found the content either not to my expectation or taste and even in some cases downwright offensive!
I can only justify paying the subsription because of use by other members of the family which includes viewing content for children.

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Paul says:
3 June 2022

I enjoy some of the content on Netflix though most of my viewing is recorded from Feeview or streamed from Iplayer.
The difficultiy I have with Netflix is how they disply information about thier content. If I am in the mood and have the time to watch a feature length film rather than a serialised production and there is nothing siutable avialable from Freeview or Iplayer, and also if there is nothing I know about on Netflix, reviewing whats on offer is difficult. Often the only information available about a film is limited to Genre, Director and starring actors. Frequiently I make a selection that loocks attractive only to then abandon it because I find the content not to my expectation or taste and possibly even downright offensive!
The only justification (and its a slim one) for continuing with the subscription is that the whole family use it – particularly for the childrens content.

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Juillen says:
3 June 2022

I’ve just unsubscribed from Netflix. The reason being lack of solid content; it is, after all, purely entertainment, and I’ve cancelled lots of the more ‘pure entertainment focused’ options from my cable contract too.

As far as I can see, it’s not a univariate issue (and if they change their terms to drop the family package, they may end up with a bit of backlash on their subscriber base too, as at the end of the day, what they’re offering is not an essential, and in today’s world, people are starting to look back more on the essentials and things like Netflix become velleities).

Amazon’s Prime is a direct competitor, and actually functions better in a more cash starved environment, being free is you subscribe to Amazon’s Prime deliveries (which I do, as it’s more cost effective for me overall). If I could unsubscribe from Prime and save the equivalent cash of Netflix, it would definitely be axed before Netflix, but as it’s part of a package, I can’t. On a purely value metric (and subjectively), Netflix beats Prime significantly in quality of what they produce as “Internally made series/movies”. Prime have a habit of ruining what should be good stories, potentially because they have no pressure not to, as it has no feedback into their subscriber base.

I’ve not gone further into Streaming, but there’s definitely fragmentation of the market with some ‘must see’ things in each camp, or at least many of them. The overall sum is too much for an average subscriber to field, so it’s natural to cancel, move and rinse/repeat. This is an observable thing in many fields where there’s a consolidation into a central monolithic structure, which then comes under pressure from distributed solutions, and often falls, or is at the very least eviscerated by that pressure. Then other efficiencies are made, which start tying things back to a monolithic structure once more. Netflix is currently experiencing the “distributed model” pressure.

The algorithm is definitely a bit quirky. This is a well known side effect of many of the learning models that are out there today. Amazon is notorious for it, and actually as one of the worst predictive models I know of. You buy something, and all of a sudden, your advert feed is spammed by hundreds of alternatives for what you could have bought (buy a dishwasher, and suddenly, you’ll be spammed for advertisements for dishwashers for a considerable time).
Learning and option models are still quite ‘primitive’ despite being technically quite complex. There’s a lot of work happening in the field, and potentially, the models could already be improved, and in future definitely will be. The problem is cost and maintenance. When it’s deeply embedded in a product, especially one that is as complex as Netflix (have a read of the computer science field of “Chaos Engineering”, which was actually invented inside Netflix, and is now a field of its own which concerns large scale distributed system reliability). It’s no simple thing to replace the heart of an operational complex distributed system while it’s live (and Netflix has no downtime window, which for me as someone who works in this field is a technically staggering feat).

As far as I’m currently aware, Netflix is a one trick pony on the entertainment side. This is always a precarious niche to operate in. The one thing I can see to let it weather the coming storm (which was always inevitable) is diversification of interests. But for pure entertainment, it’s now a tough sell.

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John Ward says:
3 June 2022

Hanging on to Amazon Prime for the sake of free next-day deliveries on orders might be worth reconsidering in the approaching financial climate.

Not being subscribed to Prime I have found that if I select goods that are dispatched by Amazon [and shown to be in stock] and then choose free standard delivery, they will almost always arrive within two days. The notification and tracking system gives timely updates of the status of the order and the expected time slot for delivery. If the certainty of next day delivery is essential, or an occasional requirement, it is possible to book next day delivery for a charge of roundabout £4-5. Unless you place a large number of orders each month I question whether subscribing to Prime is worth it. Apart from anything else, it more or less locks you into Amazon for most of your purchases which might not always be advantageous. For many things, shopping in a store is a better bet since you can see exactly what you are buying and possibly consider alternatives more easily. Even better is to cut down the consumption of non-essentials considerably.

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Julian Keating says:
5 June 2022

‘You will like what you already like’
Tbe most annoying trait with the netflix, and the other, streaming service. Why is it endless murder investigations!
Closely followed by ‘Padding’ or the ‘Discovery’ syndrome! Where programmes constantly repeat the same information or just fill the space with boring background c..p to lengthen episodes and extend the series.

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Andrew says:
7 June 2022

My problem with Netflix is that as an organisation it doesn’t understand when to call a day on a good idea. Netflix seem to want to drag too many of them out across multiple seasons, when one or two seasons would have been more than adequate for the premise (eg Designated Survivor). Out of habit you get drawn in watching when the spark has been lost, and season upon season is just a rehash. Add in too much content that has little or no originality (eg endless movies with the plot “retired ex spy/special forces guy comes out of retirement to wreak havoc on bad guys who threaten his family”). Or you have changes between seasons so that there’s a complete loss of the spirit of the previous season (eg The Witcher). Even fun stuff like Stranger Things now seems repetitive with no momentum, driven now only by a focus on horror SFX rather than plot or character. There’s been some great foreign content, dubbed or subtitled often accompanied by great plot, ideas or excellent photographic or production work (eg Lupin), but Netflix don’t seem able to sustain that. And then there’s an unwelcome obsession with political and social posturing in too much of their content (although common across many US media sources). Add in Netflix throwing a lot of money money at a certain ex-Royal couple, and I’m finding it hard to justify the cost. I suspect the problem is the usual one for US tech corps – the team that made the business grow have been replaced with corporate dullards trying to maximise profits without really understanding what attracted customers in the first place and who think churning out content is an easy, repetitive task.

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Michael Allport says:
29 June 2022

The reason I do not go near Netflix is simply the fact that they paid millions to those that untalented couple Harry and Me again to knock our Royal family. None of my money is going to finance those two free loaders. I am discussed that Netflix would show such rubbish and lies.

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