Netflix’s grip on the streaming market looks to be drawing to a close as the platform faces up to a quarter of disappointing growth and a mounting number of would-be competitors.
The media titan's latest earnings report indicates that it added just 2.7 million new subscribers globally over the April-June period, well below the forecast 5 million. It also lost 130,000 viewers in the US, its biggest market.
Netflix blamed its content slate for the slump and said that first quarter subscriber growth had been so strong that “there may have been more pull-forward effect" than it realised in Q2.”
It also said in a letter to shareholders that the missed forecast was most pronounced in regions that saw subscription price increases.
Revenue from subscriptions sat at $4.92bn versus the $4.93bn expected. However, the streaming giant insisted its service would remain "advertising-free" for the "long term".
Luke Bozeat, chief operating officer at MediaCom UK put the slump in subscriber growth down to increased investment from rivals in original content.
“Every streaming service can try to outdo each other when it comes to how they deliver content to audiences and indeed attract new users to their platform, but the reality is that even the most innovative approach will only work if audiences want to watch the content that’s on offer," he said.
"And it’s clear that Netflix doesn’t have the monopoly on hit shows; Stranger Things may have recently broken the streaming record, but Sky’s success with Chernobyl had the whole world talking and the BBC’s Killing Eve captured millions of viewers from not only the UK, but also the US and Australia."
He added that in the race for subscribers, viewers will be hoping Netflix doesn't end up in a situation where it prioritises "quantity over quality."
"The story and the content is what matters, and media companies should be mindful that audiences will start to vote with their wallets if they don’t like what they see," he finished.
In recent months Netflix has weathered a barrage of warning shots from the likes of Disney+, Britbox, HBO Max and NBCUniversal as studios jostle to claim their slice of the streaming pie which have already seen it lose the rights to hit shows such as The Office.