Although the number of people subscribing to Netflix services has snowballed over the years, surging by more than 500% in a decade to 277 million as of Q2 2024, people are spending less and less money on the streamers’ mobile app. According to data presented by Stocklytics, Netflix’s in-app purchase revenue has been falling for nine straight quarters, reaching $38.1 billion in Q2.
Several key factors drive Netflix’s in-app purchase drop. For a start, the price of Netflix subscription plans has skyrocketed over the years. As of October 2023, when the last price increase occurred, Netflix users paid $11.99 instead for the basic plan, nearly 35% more than ten years ago. The premium account now costs $22.99, practically twice the price users paid back in 2014. These price hikes have reduced subscriptions through IAP channels.
Another major reason is Netflix’s push for direct billing, which helps the company avoid paying commission fees to app stores. Additionally, the competition in the on-demand streaming landscape has grown tremendously, with new providers gaining users and increasing their market share. These shifts in payment methods and user behavior are cutting into Netflix’s IAP revenue.
Statista and AppMagic data shows that the streaming giant’s in-app purchase revenue generated on Google Play and Apple App Store has fallen for nine straight quarters to only $38.1 billion in Q2. This represented a 14% drop compared to the previous quarter and a 17% decrease compared to Q4 2023 figures.
However, a deeper insight and comparison to IAP revenue in 2018, still the record year for Netflix’s app, shows a shocking difference. Statistics show Netflix’s IAP revenue plunged fivefold since Q4 2018, when it hit an all-time high of $191.2 million.
Despite the substantial drop in its IAP revenue, the number of people subscribing to Netflix services continues rising. In 2014, Netflix added 8.3 million new subscribers, bringing their total number to nearly 55 million. Two years later, the number of new subscribers more than doubled to over 18 million, pushing the total user count to almost 90 million. In 2020, amid the lockdowns, Netflix added 36.5 million new subscribers, the highest number in the platform’s history, reaching over 200 million users that year.
After a significant slowdown in 2021 and 2022, with the streaming giant adding 18.1 million and 8.9 million subscribers, respectively, Netflix subscriber growth gained momentum last year, with the company reporting nearly 30 million new users. The strong momentum continued in 2024, with another 17.3 million users flocking to the streaming platform in the first half of the year and pushing the total user count to 277 million. If this trend continues in the year’s second half, 2024 could become one of the best years for Netflix subscriber growth. Thanks to its ever-growing subscriber base, the streaming giant has grossed over $207 billion in the past decade.