Netflix Inc's (NASDAQ: NFLX) troubles seem to be running deeper. The streaming giant is reportedly losing the support of its longtime subscribers as it tries to pull out all the stops to turn around its fortunes.
What Happened: Netflix subscribers who have been with the company for over three years made up 13% of those who canceled subscriptions in the first quarter, the Verge reported on Wednesday, citing the Information.
Survey data viewed by the Information showed that longtime subscribers accounted for just 6% of cancellations in the second quarter of 2021, and those subscribed to the service for less than a year made up 70%, as per the report.
The numbers suggest that Netflix is clearly struggling to retain customers longer.
Total cancellations reportedly surged to 3.6 million last quarter, up from 2.5 million cancellations in the past five quarters, the report added.
The Information based its report on data provided by analytics firm Antenna.
Related Link: Netflix Lays Off 150 Employees Due To 'Slowing Growth:' What You Should Know
Why It's Important: Netflix said it lost 200,000 net paid additions in the first quarter, the first time since the October quarter of 2011. More importantly, it warned it would lose another 2 million more users in the second quarter.
The company blamed some of the weaknesses on households sharing passwords. Streaming competition, an uncertain macroeconomic climate and Netflix's Russia exit have also added to the pressure.
The company has said it would clamp down on password sharing and introduce an ad-supported model to experiment with competitive pricing.
Analysts are not expecting a quick turnaround. KeyBanc Capital Market analyst Justin Patterson gives at least 18 months for any perceptible improvement to materialize.
See Also: Netflix Launched Its Website 24 Years Ago: A Timeline
Price Action: Netflix shares ended Wednesday down 7.02% at $177.19, according to Benzinga Pro data.
