Netflix’s Subscriber Loss, HBO’s Gain Point to Changing World for Streaming Services

One streaming media platform’s loss may be another’s gain.

Numbers tell a tale — and the subscriber numbers that have just come out from Netflix and HBO/HBO Max tell some starkly different stories.

As we reported this week, Netflix said that its subscriber base was 200,000 souls lighter in the latest quarter, and the company stands to lose as many as 2 million individuals this quarter.

Read also: Don’t Look Down: Slump in Netflix Subscribers Bucks Connected Economy’s Rise

On the flip side, in evidence that Netflix’s “pandemic pull through” is not universal: HBO and HBO Max added about 3 million subscribers, quarter over quarter, and 12.8 million subscribers year over year, with the most recent tally at about 76.8 million at the end of the first quarter.

That’s per commentary from AT&T, which was HBO’s previous parent company of the parent company, so to speak, of WarnerMedia. That latter firm is now under the Warner Bros. Discovery umbrella.

But no matter where home is, and whether HBO has siphoned off some Netflix users, management said on the AT&T conference call with analysts that subscription revenues were up 11% year over year, led by HBO Max.

One differentiator in the model here is that HBO Max, in the past, released films over streaming conduits on the same day they were released in theaters. More recently, films like “The Batman” have been coming to the platform mere weeks after their brick-and-mortar releases.

Midstream Adjustments

But beyond the content, it’s important to note that the porousness of the streaming media model demands additional lines of defense to keep the subscribers on board. Now, perhaps more than ever, price competition and content are not enough. With inflation at about 8%, people are taking a closer look at household expenses. PYMNTS data shows that the average consumer has five different subscriptions in place — meaning that they may be more inclined to cut costs.

In a recent interview, Sanjay Kamble, vice president of product management at subscription-commerce platform sticky.io, told PYMNTS that firms need to reexamine their value propositions and cross-sell where possible.

According to the latest Subscription Commerce Conversion Index, a PYMNTS and sticky.io collaboration, 10 million people — or 12% of all retail subscribers — are using subscription services to access products that they can’t find elsewhere.

Read also: With an Eye on Loyalty, Subscription Models Get a Post-COVID Refresh

Lower Prices, Higher Revenue Stakes

For the Netflixes of the world, where the core “streaming” product (in this case) is not garnering the fan fervor it once was, the above stats should be a bit heartening. There’s a willingness for consumers to blend commerce with content, to bring connectivity into the mix across all manner of interactions. Streaming media, in other words, can offer up a chance for engagement with an eye on … transacting. And vice versa.

Subscription models are being integrated into retail, where, for example, Lululemon is offering monthly memberships that expand beyond clothes to include events and classes.

Netflix, of course, is reportedly on its way to offering an ad-supported model that would, perhaps, be extensible. And it may be a way to increase consumer engagement, akin to what’s been seen in social media.

Presented with an ad for something you might like, in the midst of a Leo DiCaprio movie, you might be tempted to click and buy — or share the ad content with friends. What begins as a way to lower price points in an age of inflation becomes a way to cross-pollinate commerce (and for Netflix, get a cut of partnership revenues).

The curtain’s just rising on this next installment of streaming.