LogInThe streaming giant reported that in the first quarter of 2022, the number of its subscribers fell by 200,000 compared to the previous quarter. The company also mentioned that it is considering introducing a lower-cost, ad-supported subscription plan.
On Tuesday, Netflix reported that it had lost subscribers for the first time in more than a decade. According to the company's earnings report, the number of subscribers of the streaming service fell by 200,000 in the first quarter of 2022 – from 221.84 in Q4 to 221.64 million.
In its letter to shareholders, Netflix noted: "Our revenue growth has slowed considerably. Covid clouded the picture by significantly increasing our growth in 2020, leading us to believe that most of our slowing growth in 2021 was due to the Covid pull forward."
The price change is cited as one of the factors that influenced the loss of subscribers. In January, the company raised its subscription price (from $13.99 to $15.49 per month) for the first time in two years. Since then, the number of subscribers across the US and Canada decreased by 600,000.
Netflix forecasts that in the coming quarter, the loss will amount to another 2 million subscribers. The streaming giant warned investors that revenue growth has slowed significantly due to increased competition in the market, "geopolitical events", as well as an increase in the number of viewers who use other people's accounts.
The company estimates that more than 100 million households watch the service for free using shared passwords. Earlier Netflix already started seeking ways to prevent the practice of sharing passwords with other people and began to test two new features in Chile, Costa Rica, and Peru: adding an extra member sub-account for an additional price and transferring profile information to a new account.
Netflix co-CEO Reed Hastings also mentioned that the company is considering introducing a lower-cost, ad-supported subscription plan. Hastings has long argued against complicating the service with different subscriptions and the implementation of advertising, although now he admitted that Netflix is ready to consider a cheaper subscription as an additional option for users. He didn't specify any details of the lower-cost subscription.
You can find the letter to Netflix shareholders here. Also, don't forget to join our new Reddit page, our new Telegram channel, follow us on Instagram and Twitter, where we are sharing breakdowns, the latest news, awesome artworks, and more.