Netflix Reports Almost One Million Subscribers Lost Over The Last Quarter
Netflix, one of the most popular streaming platforms, has been under the spotlight lately due to a significant decline in its number of subscribers. After losing an important amount of subscribers for the first time in a decade over its first quarter, the plummet kept going, making the company lose about 1 million subscribers over the second quarter.
According to the company’s report, this decline started with a leading loss of 200.000 subscribers between January and March, leading to a total of 221.64 million subscribers. Then, from April to June, the numbers kept dropping significantly down to 220.67 million subscribers with a loss of about 1 million subscribers. This is a fair result compared to the loss of 2 million subscribers speculated by CFO Spence Newman.
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Though this seems like an important loss that’s being underestimated, Netflix’s shareholder letter communicates the matter in a very knowledgeable way, showing that the company understands the reasons behind its slowed subscriber gain and is willing to find solutions to correct it.
Firstly, the streaming company blamed the global economy, stating that the appreciation of the US dollar compared to other currencies was one of the reasons for the variance in their revenue. Furthermore, the war in Ukraine impacted significantly the company’s revenues for the latter terminated its services in Russia following the attack on Ukraine, shutting down around 700.000 accounts. As a result, and after a global gain of 500.000 subscribers, the company reported a loss of 200.000 in its Q1. Finally, the streaming company shared its concerns regarding account sharing. While the latter has always been aware of that tendency, it wasn’t considered an issue until their numbers showed a critical decrease this year.
As for solutions, Netflix is testing new ideas to counter the sharing account issue like the implementation of additional fees and a verification system. The company is also planning to add a lower-priced ad tier to their roster in partnership with Microsoft. As for now, Netflix can only rely on its content slate to keep its numbers up, and there is no doubt in the fact that its numbers would have dropped even more if they had stopped advertising and releasing highly expected content such as Stranger Things season 4 or The Gray Man.
Presently, Netflix is projecting to recover one million subscribers and revenue growth of 5% in Q3.
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Source(s): Netflix Financial Report, IGN [1] [2] [3]