People Aren’t Cancelling Netflix Because of Price Increases, They’re Cancelling Because the Library is Shrinking

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It used to be impossible to choose something to watch on Netflix because there were so many great movies and TV shows. But now, it feels like it can be difficult to choose something because the selection feels more and more limited. Most people don’t expect to live stream the Knicks or Nets game from Netflix but they’re looking for a broad library of titles.

During their quarterly earnings call this week, Netflix commented that the missed target of subscriber growth was likely due to a small price increase a few months ago, where all subscriptions increased $1 per month. Jim Cramer on ‘Squawk on the Street’ commented that he was shocked that people would cancel over what seems like a relatively arbitrary amount.

But both Netflix and Cramer can’t see the forest through the trees on this earnings miss. This subscriber slowdown has very little to do with $1 more a month and far more to do with the Netflix library drastically decreasing.

We reported last month that the Netflix library has fallen 40% over the past four years, and this is clearly the reason people are starting to cancel their Netflix accounts. The one dollar price increase was merely a check-in for Netflix subscribers, many of whom are now realizing that their Netflix usage is declining, both as the Netflix library shrinks as well as other competitors cropping up. When presented with the alert that their Netflix subscription price was going to jump up ever so slightly, it was a reminder to check in on just how much utility the service was offering.

Netflix has made a big bet on original shows, and to some degree of success, these have been great. But could this big bet just not be delivering enough quantity to keep users happy? A lot of Netflix subscribers comment on the quality of the Netflix library, and the top 10% of the content is unarguably fantastic. But there is a lot of junk at the bottom with even more mediocrity in the middle.

We struggle to believe that spending $90 million on Will Smith movies is sustainable or the right strategy for the streaming service. Certainly, despite having total ownership over this content, that money could easily be spent elsewhere. As a benchmark, Hulu paid $180 million for the rights to stream ‘Seinfeld,’ likely one of the most expensive television shows, for five years. We’d much rather have half of the Seinfeld catalog than one movie when it comes to paying for a streaming subscription.

We can’t wait to see what else Netflix comes out with as they release more original titles. The recent ‘Stranger Things’ is pure magic, and who doesn’t want more ‘Making a Murderer?’ But at the end of the day, Netflix needs to balance out growing their own original library with maintaining a library of third party content.

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64 Comments on "People Aren’t Cancelling Netflix Because of Price Increases, They’re Cancelling Because the Library is Shrinking"

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AyexeM
Guest

I totally agree about original vs licensed content, except “Making a Murderer”, I couldn’t even finish that series. There are several Netflix series that I love but there are glaring omissions in older content. They need to buy Miramax or something, maybe then they will get some decent licensed content.

NegativeFeedback
Guest

Besides Finding Neverland, what does Miramaxh have to offer?

BluePotion
Guest

Innocent or not that movie was so dreary. The only thing I got out of it is I am glad I don’t live in that depressing town.

Hard Little Machine
Guest

Dead on. There is virtually nothing from just a few years ago. Entire genres have been wiped out and the self produced programming is slipshod at best. Most of Netflix own offerings are either awful slow-burn shows or weak sitcoms.

Nicholas Laing
Guest

Spot on article. The check-in process is exactly what I went through when they put the price up.

Ingold Inglorion
Guest

The wife was just saying this the other night..seems she can spend hours flicking through Netflix and their awful interface and find absolutely nothing to watch. Myself I haven’t turned Netflix on in months.

Of course I rarely go to Netflix for movies…can’t stand most movies made since 2000 anyway. I wish Netflix had more classic sitcoms. Where’s Three’s Company? No Hanna-Barbara stuff?

nerdrrage
Guest

Good example of Netflix’s dilemma. I’ve never bothered with Three’s Company, hate old sitcoms (and most new ones), have forgotten all about Hanna-Barbara schlock. How does Netflix satisfy us both while keeping their costs down under ten bucks? And there are millions more like us that want A, B and C while the next guy wants D, E and F, and there aren’t enough letters in the alphabet to cover all the options.

BluePotion
Guest

You don’t like the Flintstones?!?

Malmborg Implano
Guest

Sounds like me when I canceled my cable subscription.

Scuba Steve
Guest

Kodi (tv addons) is the real reason people are leaving Netflix and Hulu.

Benjamin Mariano
Guest

no it’s not. the mainstream consumers (30 and above) for the most part, aren’t aware of Kodi.

nerdrrage
Guest

Piracy has been around forever. Somehow it didn’t stop Netflix, Amazon and Hulu from launching and growing into significant businesses. Why should piracy allasudden be a factor now?

The streaming business isn’t really about pirates. It might siphon off a few but some will always want something for nothing. So forget them, they’ll never be customers. The battle is for the mainstream audience that doesn’t want to hassle with piracy, they just want a button to push to get their damn shows. Like old time TV. Plop on a couch, point the zapper, done.

Desurt Trippur
Guest

I dunno, for a lot of people pirate streaming is an adjunct to legitimate subscription services. Look for something on Netflix, if it’s not there (increasingly likely it’s not), fire up a “doctored” version of Kodi on the Android box. But sure, a lot of people don’t want to fiddle with the cryptic setup procedure for bringing addons into Kodi, or trying to find a stream that works every time you want to watch something.

chrizmyller
Guest
The majority of people who pirate, I’m saying something like 90-95 percent, wouldn’t purchase the product regardless, even if piracy wasn’t available. The same goes for movies and music. The overwhelming majority of pirates now wouldn’t buy the stuff even if their illegal sources were unavailable. In the early days of file sharing that wasn’t true. Piracy was a fringe thing that very few people knew about it. Napster changed that. While, not Napster itself but the RIAA’s reaction to Napster changed that. Napster was being used by a small amount of people. DUring it’s first year in business the… Read more »
rsmiff
Guest

I’m well over 30 and know all about Kodi, formerly XBMC. I only have Netflix for my kid.

BluePotion
Guest

So funny how they think they came up with everything that has existed since the 80’s.

BluePotion
Guest

30? That’s a little young. Didn’t they graduate Highs School like 12 years ago?? Remember our parents who are 50 were there at the start of all of the computer world. I think they know how to utilize it. They were the ones building their first computer long before you showed up. Who do you think created the first pirating site? Or YouTube etc?

tomsans
Guest

King of the Hill, Top Gear, Dr. Who, How it’s Made, M*A*S*H, so many good shows gone. Very few new shows to replace them.

HiredGun Mercenary
Guest

I watched every episode of How it’s Made 2x..that show is awesome.

DougN
Guest

Is on Hulu now.

Malmborg Implano
Guest

On the other hand, the BBC’s decision to license Doctor Who digital streaming exclusively to Amazon in the U.S. is infuriating.

DougN
Guest

Do you not know of the wonder that is VPN? (tunnel bear anyone?)

Clyde_Frog
Guest

This is the reason piracy exists right here.

DANNYonPC
Guest

TG is still on?

tomsans
Guest

They had all the seasons for a very short time, than all the seasons except for 1 for a long time, now it’s just 17 up. So no Botswana special, no North Pole, no American southern special, no Cool Board, no boat/cars, RV/cars, Lorry Racing, etc etc. The show really reached it’s peak between 7 and 13, it was just great.

Rabblerouser
Guest

Is “How the Universe Works” still on Netflix?

merrickal
Guest

They removed Dr. Who?! Ugh.. reasons to keep Netflix has suddenly plummeted.

Ian Jackson
Guest

KotH disappointed me when they removed it. I was gonna binge watch it, and was halfway through season 2 and it was removed. Can’t trust Netflix, man. I think they should have an expire date so we know when the contact dies off for a series or movies.

nerdrrage
Guest
Sure that $90M could be spent “elsewhere,” but where? More schlock like Fuller House and Adam Sandler movies, both of which did well for Netflix? How about more prestige series like Orange is the New Black and House of Cards? How about more niche-appeal series like Stranger Things and Jessica Jones? Netflix’s problem is that $90M doesn’t go as far as you think when you are trying to keep everyone happy. Their strategy is to basically grow and grow in a maniacal fashion so that they will get a firehose of money coming in that will allow them to keep… Read more »
Janson Media
Guest

Amazon Video…

nerdrrage
Guest

If you mean Amazon Prime, the direct competitor to Netflix,their selection is even worse.

Janson Media
Guest

I do mean Amazon Prime Video. Their selection has been growing a lot, compared to Netflix’s shrinking of content. Also, their inclusion of HBO series, the recent exclusivity of PBS Kids content, the acquisition of all Quentin Tarantino films, plus the additional add-ons like Showtime & Starz, Amazon is growing and Netflix should be scared in my opinion.

Malmborg Implano
Guest

Amazon is making excellent progress in doing with digital content what it’s done with books–creating a ruthless monopoly that undercuts competitors out of existence, shortchanges content providers and creates a situation where they can dictate terms to those providers on pain of shutting them out of the distribution system. In other words, the Walmart of the mass media. Not a good situation.

Janson Media
Guest

Actually out of all of the digital platforms, Amazon Video pays the greatest per view royalty. Our company delivers to all of them and Amazon is actually a very good situation right now to be in as a content provider.

BluePotion
Guest

I feel like they are almost exactly the same as far as content but at least I get free 2 day shipping with Amazon.

David Watters
Guest

Unfortunately this doesn’t extend into Canada. Amazon offers no streaming services north of the border. I would sign up in a heartbeat as I am a very big Amazon buyer.

Janson Media
Guest

Yes, this is odd as it is available in the U.K., Germany and Japan. I would expect Canada to launch in the very near future though as well as additional territories.

Teranode
Guest

This is another major problem, region availabilty. Im pretty sure everyone would get along more if that wasnt a thing. Hence that is another reason why piracy exists.

Maniate
Guest

I’m still waiting for someone to do for television and movies what Valve did for digital PC games with steam. Until then I’m going with the service which allows me to watch everything I want to, which is piracy. I’d prefer not to, but that’s how it is.

RenoGruber
Guest

Just don’t buy anything legally on Itunes. Apple will apparently turn your information over, and you’ve basically incriminated yourself.

That said…Yay KAT is back!

some person
Guest

Awwww, KAT is gone now : C

chrizmyller
Guest

Get a chromestick, firetv or other streaming service not made by Crapple, put kodi on it and add the exodus extension. You’ll have every show you want from ever channel you want in the USA, UK and Canada.

Malmborg Implano
Guest
I’m currently engaged in a “Jessica Jones” related standoff with Netflix. I want to see the series but I refuse to get a Netflix subscription just for that purpose and so I’m waiting for a DVD or at least a non-subscription-based digital release. Netflix, on the other hand, is holding onto exclusive streaming of JJ as long as it can in hopes of breaking the will of cafeteria consumers like me who have particular tastes and want to be able to pick out and pay for individual titles from an unlimited spectrum of choices, just as we do with books… Read more »
Steve King
Guest

You could pay for one month of Netflix, watch all 13 episodes, and then cancel. It would cost less than the DVDs. And since Netflix partially owns Jessica Jones (the TV show not the comic obviously) they will make a ton of money when you buy it on DVD.

Neil Weigman
Guest

Are they banking on getting the exclusive Disney deal starting in September. Having rights to the Disney library is huge.

Jeff
Guest

Good reminder — I haven’t watched in ages, so I cancelled just now. Thanks!

Clyde_Frog
Guest
The thing that gets me on the streaming side is that you can’t hide movies you’ve already rated because Netflix knows if you could then their library would shrink fast. So instead they force users to browse through all of the titles they’ve already seen and rated just to make it appear that their library is still a nice size. Their disc side is equally declining. They aren’t replacing discs like they once did, they offer half of a TV series, etc. For example, before they completely removed X-Files recently they offered the entire series except for seasons 5 and… Read more »
BluePotion
Guest

I know I hate this aspect. I can’t delete them from my list either because then I end up trying to watch them again. Very poor system and I agree it’s because of shrinking the library.

DougN
Guest

Agreed, but I have all of the streaming services (Amazon, Hulu Prime, Netflix, and own 170+ movies from the iTunes Movie Store), and it’s STILL cheaper than a cable television subscription, is ON-DEMAND, and has no commercials.

dogg food
Guest

I cancelled because of the price, everything they have is free to watch anywhere else. wanna raise the price ? ok fck you.

appleforaface
Guest

Yup.

Equinoqs
Guest

The horror section of Netflix is bare-bones, and a majority of what they have is straight-to-video crap. The ONLY reason I’m still subscribed is because of the TV shows, and I’m getting low on those.

BluePotion
Guest

I can’t stand it. I did a search for highest rated horror. I saw all 12 of them long ago.

costume
Guest

I had a friend tell me the other day that he’s canceling Netflix because he’s seen “everything”. I’m sure he hasn’t but there’s nothing left he cares to see.

Joe Smith
Guest

My kid and I were really enjoying Peep in the wide world. But it is the latest casualty. Another show I liked inexplicably gone from netflix. At the very same moment they take away another show I like they also raise the rate. I think it’s a one two punch basically. I always expected over the years netflix would add more shows, not lose the ones it has. I like some of the netflix original content but none of it is even close to enough to be worth the sub cost even before the price increase.

DutchS
Guest

You know, with people like Trump and still more the Libertarians, looking to cut government programs, maybe we could start with copyrights.

Wesley Long
Guest

So much fail in only 22 words.

Just_Joe
Guest

Hmmm, think of all the anime they could’ve had for $90 million.

Dis0bey
Guest

People, people, this is what Kickass Torrents is for. Fuck NETFLIX and the rest of the money hungry sluts. Rich, greedy sluts who could EASILY make services better quality and cheaper but they won’t because the customer service matters not, its the return for as little as investment as possible that matters, because they want MORE PROFIT for themselves as per nearly every business, ever.
Just cancel and go elsewhere.

Adam Connor
Guest

Netflix is leaving a gap in the market. A service with a higher price but a much stronger catalog could kill them… IF that can be done. It’s not so much that I feel Netflix is a rip-off (they still have enough content for what they charge), as that I’d rather get it all in one basket. It’s annoying to keep moving between different navigation schemes.

chrizmyller
Guest

Why do people still ignorantly cling to the belief that Netflix streaming is a “movie service” and get pissed when they drop titles?

It’s the modern platform for the future of TV. They are, essentially, the next wave Cable TV channel. Purely on demand, they play TV shows. Some original some reruns, and some movies. But at the end of the day they are a Premium TV channel. They have WAY WAY WAY more content than other premium cable networks, like Showtime, STarz or HBO. But for some reason people don’t get pissy about hem. It’s mind boggling.

BluePotion
Guest

Yes they do. Go to any forum about premium cable channels. HBO shows movies from decades ago yet charges you for it. Home Box Office?? No.

Ray
Guest
I think this is spot on. I realized this morning that in spite the fact that I think Netflix has the best UI of any streaming service, I wasn’t really finding anything I liked on there. I watched 4 shows regularly on Hulu and was subscribed to Netflix for the occasional film as well as comedy specials, but I hadn’t really watched anything on there in a while. I thought about the fact that HBO Now had Curb Your Enthusiasm and WestWorld and decided to switch since I wasn’t willing to pay for all 3 services. I think it’ll be… Read more »
BluePotion
Guest

L&O: SVU got rid of all it’s early seasons. I could watch newer seasons on DVR. Why do I need them on Netflix? That’s just me though. Too many Serial Killer shows that turn out to be, “Let’s release them because police corrupted the investigation”. Just put that in the title please.

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