Gen Z Women Driving Netflix Decline with 26% Drop Meanwhile Appetite for Ad-Based Subscription Services Grows
- Netflix has lost over a quarter (26%) of young female mobile viewers (aged 18-24) between 2019 and 2022 – a larger decline than any other age group
- Mobile users are not just leaving Netflix but watching for less time, with minutes spent on the app falling by an average of 25% across all groups
- Netflix also saw a greater decline in its net promoter score (NPS) than any other major video streaming service
- Despite Netflix’s decline, use of other major subscription streaming services has been growing amongst mobile users with a 10% increase across all age groups
- Minutes spent watching ad-based subscription streaming services have also grown (19% over the same time period 2019 to current), showing potential appetite for ad-funded Netflix
Dulles, VA, 19th July – With Netflix set to release its Q2 results later today following its recent announcement that it will partner with Microsoft to offer an ad-funded subscription package for the first time, new data reveals that it is younger women who are contributing most substantially to the subscription streaming platform’s decline. However, the data also hints at possible interest in its new ad-based plan, provided it can overcome falling consumer satisfaction in its programming.
The number of females aged between 18-24 using the platform on their phones plummeted by over a quarter (26%) between January 2019 and June 2022, with an 11% decline in Q2 2022 compared to Q2 2021. The largest group of Netflix mobile app subscribers, women aged between 25-34, has fallen more than 10% since 2019, with a 2% decline this quarter compared to last year.
The findings, published by mobile insights consulting firm Global Wireless Solutions (GWS), were collected and weighted via the company’s opt-in OneMeasure Consumer Panel (OMCP) of 200,000 US adult smartphone users: capable of providing a 360-degree view of consumer behaviour, choices, and satisfaction.
It illustrates that even among users who are not leaving Netflix, the number of minutes spent on the mobile app has fallen across all age groups. The most significant fall was also seen in women aged between 18-24 whose time spent streaming Netflix content on their phones has fallen by more than 39% since 2019. Men aged between 25-34 reduced their time watching Netflix by a third 33%. Despite Netflix’s decline, use of other major subscription streaming services has been growing amongst mobile users with a 10% increase across all age groups.
To slow the decline in user drop off from its platform, Netflix has recently announced that it will offer an ad-funded subscription package to consumers at cheaper rates. GWS data shows some evidence supporting this plan. While the number of users choosing ad-based subscription streaming services has remained flat since 2019, the most recent quarter of 2022 saw the number of minutes watching on these platforms steadily increasing; up 6% overall compared to the same time in 2021 (and up 19% since the start of 2019). Survey data also suggests some appetite for an ad-based subscription package on Netflix, with nearly half (49%) of those surveyed by GWS ambivalent or showing no interest in paying more to skip advertising on television, opting to go without a premium ad-free option. Translation: nobody likes to sit through ads but the potential is clearly there for service providers if the price is right.
However, GWS data presents a more nuanced picture of why consumers are leaving Netflix, showing that the streaming giant will have to do more than harness the potential willingness of consumers to put up with advertising to win back viewers. When surveyed on their main reasons for choosing Netflix over another streaming platform, more men and women (28% for both) previously selected ‘variety of programs’ and ‘availability of specific shows’ compared to other factors such as price for value, capability to stream on multiple devices, user interface, and other factors. However, today the variety of Netflix shows seems to have less appeal as those figures have dropped to 26% for men and 25% for women.
This follows a wider fall in consumer satisfaction with Netflix which has also been falling steadily. Since the survey began in December 2021, the streaming giant saw the biggest overall drop in its NPS (net promoter score – a metric used to determine consumer satisfaction), falling from 31 to 17 with females, and from 17 to -2 with males. Amongst younger females, who are leaving the platform in such numbers, the score is now -12.
In terms of its results from the most recent quarter of 2022, Netflix saw a 1.3% decline in the number of users on its smartphone platform compared to the same quarter last year. It did, however, improve when it came to minutes spent watching on its service, with an increase of 2.4% compared to Q2 2021; figures likely aided by the length and popularity of Stranger Things Season 4.
Netflix can also be buoyed by the fact that every other major subscription streaming service had fewer minutes spent watching on phones in the second quarter of 2022 compared to the first. Since launching in January of 2021, Discovery+ experienced its lowest quarterly minutes of use at an estimated 3.2 billion minutes streamed; at its peak, the third quarter of 2021, Discovery+ users watched 4.8 billion minutes.
However, Netflix competitors, HBO Max and Twitch have seen their number of sessions (a show watched that lasts 30 minutes or more) grow steadily in past three years. This adds to the significant growth in overall minutes spent on HBO Max across both gender and ages ranges in the past three years. The service has proven particularly popular with young men with the number of minutes spent on HBO Max by male users aged between 18-24 increasing 66% in the past year.
Despite the influx new players in the streaming market, such as Disney, Discovery, and Peacock, Netflix remains the most popular premium content service for mobile users. Yet even the number of minutes spent on Netflix is dwarfed by video sharing platform YouTube. Since 2019, GWS data shows that YouTube viewers have watched nearly 6 million more sessions between 30 minutes and an hour than Netflix, as well as 350,000 more sessions longer than 3 hours.
While YouTube is more popular than any subscription streaming service across all age groups, younger users dominate the platform in terms of minutes watched. Those aged between 18-24 clocked 80% more minutes per day on the platform than the next most frequent age range, 25–34-year-olds.
The findings come amid further survey data, collected by GWS, which show the smartphone to be the most-used device for video entertainment in the US. 71% of survey respondents use smartphones for this purpose, and they remain the most popular device for watching videos and news, and the second most popular for events, movies, and tv shows.
Paul Carter, CEO, Global Wireless Solutions, commented: “For most people, smartphones are now their main portal into the world of entertainment and leisure. Understanding how consumers approach the range of video content available at their fingertips is therefore hugely important for the biggest brands in online entertainment. Netflix’s decision to introduce an ad-based package to users at cheaper rates does follow some of the data when it comes to the appetite of consumers to watch programs with ads.
However, Netflix should take a holistic view into its consumers’ wants and needs, and not ignore their calls for improved program variety. All subscription based streaming services should think carefully about how they can continue to inspire younger audiences — listen to the data and understand the demographics. After all, loyalty is not a forever thing. While these platforms can take comfort from the fact that consumers consistently declare mobiles as crucial devices for their consumption of video content, an increasingly competitive market will always mean consumers are attracted by the best content and the best service when streaming online.”
Data presented in this release is collected from GWS’s OMCP between January 2019 and June 2022. OMCP is an opt-in consumer panel that measures mobile app usage and content, mobile network performance, and consumer perceptions. The OMCP collects consumer data anonymously from Android smartphones 24 hours a day, seven days a week, whenever and wherever consumers use their devices. Panelists also have the option to participate in surveys fielded directly to their Android smartphone.
OMCP panelists (aged 18+) are recruited from the top 41 metropolitan areas across the US along with consumers located in less populated areas. Total sample size of the panel averages 200,000 unique U.S. consumers annually. Data is anonymously collected and reported in aggregate for market research purposes only. All information collected is weighted to a user’s demographic representation of the U.S. population (aged 18+).
The survey data presented in this release was based on an OMCP monthly survey conducted from December 2021 to May 2022. The survey results are based on a total sample of more than 56,000 adult respondents (aged 18+).
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Lucie Bickerdike/Adam Hudson