Netflix has reported a loss of 200,000 subscribers in this year’s first quarter, but expects to lose two million in the second.
For the first time in ten years, Netflix has reported a loss in subscribers numbers. In Q1 of 2022, the streamer lost 200,ooo subscribers, it revealed as it reported its first quarter earnings on Tuesday. Variety reports that the main reason for this is the loss of the service in Russia due to the county’s invasion of Ukraine. Discounting that, the company would have seen a rise in subscribers of around 500,000.
The fact that the streaming service has lost subscribers in a quarter that saw the release of original films like The Adam Project and popular series like Bridgerton has come as a surprise to the company. Wall Street analysts had predicted subscriber growth of 2.8 million. As for why this has happened, Netflix is blaming both the increase in competition from other streamers, as well as password sharing, which it’s trying to crack down on.
“We’ve got to compete, and we’ve got to continue to improve on the core service which is making TV series and films and now games that people really love,” co-CEO and chief content officer Ted Sarandos said after the figures were published. “That’s what we’re really focused on and that’s a thing we can continue to grow the business in. Now, we talked about being highly penetrated in some of those core markets with users, which means that it’s harder to get them to join Netflix if they are already using Netflix. So we’ve got to figure out these different models that we’re doing now to more effectively monetize that viewing.”
The company is reportedly looking into launching a low-cost version of the service that is ad-supported, even though this is something they’ve long been against. Despite the faltering subscriber numbers, it’s said it’s committed to still spending around $18 billion on original content this year. However, CFO Spencer Neumann also said that Netflix would be “smart and prudent in terms of pulling back on some of that spend growth to reflect the realities of the revenue growth of the business.”
As subscriber growth and profits slow, we’ll have to wait and see how Netflix attempts to adapt to the changing streaming landscape.
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