‘Low-hanging fruit’: Australians ditch Netflix as budgets tighten

Netflix is losing Australian subscribers after cracking the whip on password sharing.

Netflix is losing Australian subscribers after cracking the whip on password sharing. Photo: TND/Getty

The number of Netflix subscribers has dropped for the first time in Australia, as growth slows across all streaming platforms.

Netflix had a 3 per cent drop while other streamers increased subscriptions, revealed Telsyte data for June that was released this week.

Netflix still leads the pack with 6.1 million Australian subscribers, and Amazon Prime Video was next with 4.5 million subscribers.

This isn’t the first time Netflix has lost subscribers, but the recent Australian downturn is significant.

Password crackdown

Monash University lecturer in film and screen studies Tessa Dwyer said Netflix’s recent crackdown on password sharing likely played a role.

The report found about 7 per cent of respondents who had subscribed to Netflix in the past 12 months stopped their subscription due to new rules around account sharing; and as of June the local uptake of Netflix’s new extra member plan hadn’t exceeded the number of cancellations suggested by survey findings.

However, Netflix reported that globally, new subscribers exceeded account cancellations over the second quarter of the year following its crackdown on password sharing and introduction of an ad-supported plan.

“The more new streamers that there are, the less audience share there is per streamer,” Dr Dwyer said.

“There’s also other factors like this recent crackdown on sharing … that hasn’t gone down particularly well with the Australian population.”

With the report’s findings showing almost 60 per cent of Australians want to see more local content on subscription video on demand (SVOD) platforms, and a third saying they are more likely to subscribe to an SVOD service that supports and invest in local productions, Dr Dwyer said Netflix may not be up to scratch compared to other platforms.

“Netflix has got some Australian content; they’ve done some big launches [such as] the remake of Heartbreak High last year … but perhaps … that’s [still] not seen as a particular strength of Netflix,” she said.

Household budgets under pressure

Marc C-Scott, Victoria University senior lecturer in screen media, said summer could see things turn around for Netflix as typically fewer new programs hit TV screens from November to January, and kids spend much more time at home for the holidays.

But overall, cost-of-living pressures mean Australian households could be cutting back on luxuries such as streaming.

Telsyte’s data shows the total number of subscribers to subscription services in Australia increased by 3 per cent to 49.9 million in June, with the average number of SVOD subscriptions per household rising to 3.4.

However, the growth in subscription services was lower than the double-digit increase observed in the previous year, and almost half of subscribers claim they are more likely to switch between different services to save money than previously.

“Entertainment is not necessarily a critical part of everyone’s daily lives; food, all those essential things, are,” Dr C-Scott said.

“So the first thing that’s probably going to go is … what you have to spend on entertainment, and subscription is part of that.”

Mark Neilsen, Finder streaming and broadband expert, said many Australians are cutting back on their spending as they struggle to deal with ongoing inflationary pressures – and streaming platforms are “low-hanging fruit”.

“You can usually quite easily cancel [a streaming platform subscription] … it might be seen more as a luxury, so it’s probably one of the easiest things that people can cut,” he said.

Australians also might be cycling back and forth between platforms depending on the content they’re interested in, rather than just signing on to a service and hanging on to it, he said.

“I think people will just get a lot smarter and a bit more proactive with it, and kind of go, ‘Alright, I’ll have [this service] for this month, watch everything I want to watch, and then I’ll move on to the next one’,” Mr Neilsen said.

“You go through multiple services that way [one at a time], rather than signing up to them all at once.”

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