Keyboard warriors took to the Internet when news broke two weeks ago that Netflix lost thousands of subscribers in the first three months of 2022, and will further lose two million subscribers in the next three months to July. The last time this happened was 11 years ago when Netflix lost one million subscribers because of CEO Reed Hastings flip-flopping with Qwikster, its DVD-mailing service, and a price hike. 

Reactions on @bbcnews pointed to Netflix’s lackluster content.  “… The only thing holding Netflix around here is K-dramas and a couple of series,” said Lisbon-based @princesa_flamingo. 

@danagram81 wanted Netflix to improve its programming because Hulu and Apple are “crushing” them with “original series,” a view shared by @cameronharvey90 who added that Netflix should stop canceling its best shows.

But to say that Netflix is no longer the Goliath of streamers is a hasty conclusion. Granted, subscriber numbers keep streaming services working, but plateauing subscriptions don’t automatically cancel Netflix. It just needs to do some tweaking.

Whose fault?

Netflix blames password-sharing, price hike, increased competition, and even the dropping subscribers in Russia due to its invasion of Ukraine for the losses. Password-sharing is the least of the causes because, as Hastings said in a  bbc.co.uk interview, it’s “a practice to live with and [is] legitimate between family members.” More than 100 million households avail themselves of the service using shared passwords.

Price hike and inflation are major causes of the lost numbers. Netflix US raised the basic plan of $9 to $10 per month and the standard from $14 to $15.50 while Netflix UK increased rates by £1 a month. 

 “… Inflation puts a lot of pressure on the consumer [to think] about which is [the] least valued purchase,” said Steve Wreford, Lazard Management portfolio manager in a report in ft.com.

Churn rate, or the rate at which subscribers lose interest and discontinue their subscriptions, is part of it. Interest in Netflix’s digital catalog has undeniably plateaued, and, seizing the opportunity, various streamers have come out of the woodwork to challenge its streaming supremacy.

China’s iQiyi and Tencent/WeTV are opening up markets for more Chinese dramas while still delivering K-drama and anime. iQiyi will be collaborating with Malaysian production houses like Longhouse Films, MIG Productions, etc. for the original series. It’s also working with the Philippines’ ABS-CBN on two dramas and is premiering its first original Thai drama series, “KinnPorsche,” this year.

Hong Kong-owned Viu will be “super focused” on SEA, said CEO Janice Lee in an interview on asia.nikkei.com. Content will carry drama from Korea, Japan and China (including Hong Kong), but is also moving towards original Indonesian and Thai content.

South Korea’s CJ ENM will continue balancing between managing tvN and licensing its shows to regional and international streamers.

Disney will be a “major player” in local productions in South Korea and Japan, said AP president Luke Kang at APOS 2021. It has rolled out Disney+ in Australia/New Zealand, Hong Kong, Japan, Singapore, South Korea, Taiwan, and Thailand, and Disney+ Hotstar in India, Indonesia, and Malaysia.

HBO Max isn’t in Asia yet, but it has HBO Go and HBO Asia’s past productions of “Trinity of Shadows” and “On the Job.” HBO Go now streams Warner Bros films 45 days after theatrical release. Robert Pattinson’s “The Batman” just premiered on the service. 

Golden goose

While Netflix subscriptions have declined elsewhere in the world, Netflix Asia-Pacific (AP) is flying high with 1.1 million subscribers gained in the first quarter of 2022. Between Q1 2021 and Q1 2022, AP grew by 26% compared with only 7.6% in Europe, Middle East, and Africa, 4.5% in Latin America, and 0.2% in the United States and Canada, according to a report in fortune.com.

Netflix said it’s “making good progress in AP with ‘nice’ growth in Japan, India, Philippines, Thailand, and Taiwan.” 

South Korea is its biggest Asian market, earning $356 million in 2020 and climbing to $513 million in 2021. The success of Netflix Korea, established in 2016, is fueled by its K-dramas, i.e., global hits “Squid Game,” “Hellbound,” “Vincenzo,” and “All of us are dead,” with the latter landing in Netflix’s Top 6 TV series of all time in terms of cumulative viewing hours. Meanwhile, new K-drama series “Business Proposal,” “Twenty five Twenty one,” and “Forecasting Love & Weather” have stayed on Netflix’s Top 10 TV (non-English) for six to eight weeks.

Propped up by Netflix AP, Netflix hasn’t lost its crown yet. But the future is rife with intense rivalry. Competitors are succeeding in piquing viewers’ interest: HBO Max streams “Friends” and “Euphoria” and a host of Warner Bros titles while Disney + has conquered the Star Wars and Marvel universes. 

To stop its falling numbers, Netflix has to get back what it lost—jaw-dropping original content that crowned it the frontrunner of streaming service.#

Some details in this article first appeared in the weekly OpinYon (Jan. 31-Feb. 6, 2022)