Skip to content
Subscriber Only
Opinion
Tara Lachapelle

Netflix Investors, We Need to Talk About Churn

The pandemic’s stay-at-home patterns may limit turnover for now, but the streaming industry can’t support all these subscriptions forever. 

“Cobra Kai”’s new season gives Netflix users a reason to stay subscribed, at least for the moment.

“Cobra Kai”’s new season gives Netflix users a reason to stay subscribed, at least for the moment.

Photographer: Taylor Hill/FilmMagic Inc

Think of the streaming wars as a game of Jenga: How many subscriptions can you stack atop consumers before they start to pull out and the whole thing comes tumbling down? It’s that moment that has streaming-video executives nervous — only they refer to it as “churn and burn,” industry jargon for losing subscribers and their associated dollars.

Most streaming services are still very new, but eventually churn will creep up. Those that can’t hold onto enough memberships will have to fold or sell to more stable rivals. As the incumbent with the most customers to lose, Netflix Inc.’s shareholders will be keeping a watchful eye on its churn rate, including gleaning what they can from its next earnings report, which is set to arrive Tuesday after the stock market closes.