After enjoying a long reign as the king of streaming, Netflix faces a tough fight to keep its crown.
It lost almost a million subscribers between April and July as more people decided to quit the service.
The streaming giant has now lost members for two quarters in a row, but the drop was smaller than it feared.
Asked what slowed the exodus, the firm's boss Reed Hastings, said: "If there was a single thing, we might say 'Stranger Things.'"
The new season of the hit drama has been a phenomenal success, and may have helped stem the exodus of Netflix customers.
The company reported its first subscriber loss since 2011 in April, news that was followed by hundreds of job cuts and a sharp drop in its share price.
The subscriber losses reported on Tuesday were the biggest in the firm's history, with the US and Canada seeing the highest number of cancellations in the past three months, followed by Europe.
Guy Bisson, executive director at Ampere Analysis, said it was "inevitable" that Netflix would start to see its grip on the market loosen.
"When you're the leader, there's only one direction to go, especially when a large amount of competition launches, which is what Netflix has seen in the last couple of years," he said.
It is a stark change for Netflix, which enjoyed years of seemingly unstoppable growth, as it revolutionised the way people around the world consumed entertainment.
Its position as a global giant was cemented when the pandemic hit in 2020 and people, stuck at home with few other options for entertainment, flocked to monster hits like Squid Game and The Crown.
But as pre-pandemic habits return, Netflix has struggled to attract new sign-ups - and maintain the loyalty of existing members, especially as the rising cost of living leads to people cutting back.
The company also faces fierce competition from the likes of Apple TV, HBO Max, Amazon Prime and Disney+. Netflix was once the disruptor, making video rental stores like Blockbuster redundant. But the disruptor is fast becoming the disrupted.
Netflix's move to make its service more expensive has also put off some customers.Assuming they get it right - and by getting it right I mean the price ... and the amount of advertising on it - then it's potentially a strong strategic move for them," he said.
But he said Netflix's most critical task is ensuring it has strong material for people to watch - a job that has grown harder as it pushes to reach an increasingly broad audience.
New sign-ups in the US, for example, are coming from an increasingly older crowd, with different tastes than the younger viewers who were early streaming converts.
"They're increasingly competing for that generalist audience, so the breadth of content that is needed becomes much wider and that's why I think people are saying 'there's now a lot of stuff I don't like'," Mr Bisson said. "It's a very big challenge."
Netflix needs "more frequent hits", said Eric Steinberg of Whip Media, adding that Netflix also has room to experiment staggering its releases to keep a hold on its subscribers.
The company has already taken steps in that direction by releasing episodes of the fourth season of Stranger Things in two batches this year, but the "pressure is on" he said.
"They don't have the sandpit to themselves anymore," he said. "In an inflationary environment like the one we're in and also great programming [at the competition], people are going to re-evaluate how much they're willing to pay."
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