HomeCultureNetflix suffers its first loss of subscribers in ten years

Netflix suffers its first loss of subscribers in ten years

Netflix on Tuesday announced a loss of 200,000 subscribers in the first quarter of 2022, its first drop in the number of paying users in more than a decade, sending its stock market value prancing by 25%.

Netflix forecasts an overall loss of paid subscribers of 2 million for the second quarter. The last time the streaming giant lost subscribers was in October 2011, when it parted ways with 800,000 paying users.

The American company had previously told its shareholders that it planned to add 2.5 million net subscribers during the first quarter. During the same period last year, Netflix had added 3.98 million paying users.

“Our revenue growth has slowed significantly,” the company wrote in a letter to shareholders on Tuesday.

“Streaming is trumping linear, as we predicted, and Netflix titles are hugely popular around the world. However, our relatively high household presence – when considering the large number of households sharing accounts – combined with competition, creates headwinds for revenue growth,” the company explained.

Netflix estimated that in addition to its nearly 222 million paying households, the service is shared by an additional 100 million families, including 30 million in the United States and Canada.

In its letter to investors, Netflix said it was testing password-sharing subscription models that the company says will allow it to monetize sharing and increase revenue. The company revealed that the proportion of its members who share accounts hasn’t changed much over the years, but that as its overall subscriber base continues to expand, account sharing is hampering future growth on many markets.

Netflix’s fourth-quarter profit was $1.5 billion, up from $1.7 billion in the prior quarter. Revenue jumped 9.8% to $7.8 billion.

The report sent Netflix stock down as much as 25% in after-hours trading. In one year, the company lost 40% of its stock market value.




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