Netflix Losing Streaming Dominance to Disney Plus, HBO Max, Apple TV Plus

Netflix is feeling the heat. Since 2020, the global streaming giant has slowly returned to the pack, after previously dominating the market throughout the 2010s. Despite viral hits like Stranger Things and Wednesday, Netflix continues to cede ground in the streaming wars to rivals including Disney Plus, HBO Max, and Apple TV Plus. We've got more on Netflix’s steady market share decline and what that means for streaming customers. 

Netflix market share falls back to earth

Based on data from the streaming guide JustWatch.com, Netflix has lost 13% of its streaming video-on-demand (VOD) market share to competitors since January 2020. The following chart demonstrates steadily declining interest in Netflix programming among 30 million JustWatch users in 120+ countries, over the past three years. As search volume for Netflix content wanes, interest is increasing steadily in Disney Plus, HBO Max, and Apple TV Plus.

Netflix’s market share among JustWatch users has declined from roughly 46% to 33% since January 2020. Disney Plus has risen from 10% to roughly 18%. After its May 2020 launch, HBO Max has increased from 0% to nearly 10% market share. Apple TV Plus has increased from 4% to 6%. Meanwhile, Amazon Prime Video and “other” services like Hulu and Peacock have either stayed flat or declined slightly in market share. 

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To cut costs in the face of mounting challenges, Netflix launched two rounds of layoffs in 2022, firing a total of 450 employees across the United States. According to Variety, these cuts amounted to roughly 4% of its roughly 11,000 global employees. Despite that, Netflix maintained an aggressive $17 billion budget for new content in 2022, matching its 2021 content spending.

Netflix subscription deals

ABC News reports that Netflix lost nearly 1.2 million subscribers during the first half of 2022. This dramatic loss drove the company to introduce an ad-supported subscription plan that costs $7 per month in the U.S. The new price point is less than half the price of its most popular plan. This ad-supported option has proved extremely popular at a time of high cost of living, helping Netflix add 10 million subscribers in the second half of 2022.

Netflix also recently cut subscription prices in 30 of its smaller markets to lure customers back. These Middle Eastern, Eastern European, and Sub-Saharan African countries represent a small part of Netflix’s overall business, but product and pricing tests in smaller markets often make their way to larger markets like the U.S. later.

Competitor streaming deals

• HBO Max jumped into the price cuts game in 2022 by offering a 40% discount for a year's subscription to new and returning customers. The deals came after parent company Warner Bros. Discovery announced they would merge HBO Max and Discovery Plus into one combined streaming service by mid-2023. Although they may be back-tracking on that plan now...
• Disney Plus followed Netflix with its own ad-supported packages at $7.99 a month in December 2022. Disney launched major changes — including bringing back legendary former CEO Bob Iger — in a bid to boost revenue in the face of Disney Plus’ profitability problem. 
• Apple TV Plus has sought to undercut Netflix and others with high-gloss content at a surprisingly low price. A monthly subscription with no ads currently sits at $6.99, making it the cheapest ad-free streaming experience. Apple offers various promotions for Apple TV Plus, including a free year with major Apple product purchases, as well as a similar deal for LG Smart TV owners.
• Meanwhile, Amazon Prime Video still offers probably the best streaming deal on the market, at the cost of free with an Amazon Prime subscription. Surprisingly, this package deal has made Prime Video the most subscribed-to streaming service in the U.S., according to data from streaming service tracker FlixPatrol.

Netflix password crackdown

Netflix’s dropping market share and increased sector competition necessitate higher programming and marketing costs to stay ahead of its rivals. Netflix is searching for ways to increase revenue, without driving off customers by dramatically increasing monthly subscription fees. So Netflix has moved to address its longtime “free rider” problem with a password-sharing crackdown on accounts logged in outside a subscriber’s geographical household. 

Since March 2022, Netflix has rolled out several tests of its new “Paid Sharing” feature in several markets outside the United States, according to CBS News. The program uses technology to track user IP addresses and logins to nudge chronic password sharers into paying for the service. 

Up to 30 million users in the U.S. and Canada, and 100 million globally, will be affected once the program goes live in all Netflix markets by mid-2023.

The bottom line

Netflix’s market share woes have led to attractive deals for streaming video customers, as well as higher costs for chronic password sharers. Expect Netflix and other streaming giants to make more moves to keep subscribers happy, as Americans incur increasing household debt and evaluate their discretionary spending in light of persistent inflation.

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