Netflix is losing subscribers for the first time - considers cheaper ad-supported tier
Netflix has blamed increased competition and global economic downturns
Published: 20th April 2022 | Source: flatpanelsHD |
Netflix has lost 200,000 subscribers in Q1 2022
For the first time in 10 years, Netflix has lost subscribers. In Q1 2022, Netflix has lost 200,000 subscribers, with the company blaming a higher level of subscription cancellations and the company's exit from the Russian market, which lost the company 700,000 subscribers.
While this seems like bad news for Netflix, it is worth remembering that the company gained 8.28 million subscribers in Q4 2021, making Q1 2022's regression in subscriber numbers a minor factor. However, Wall Street analysts were expecting Netflix to gain 2.5 million subscribers this quarter, making Netflix's loss of subscribers damaging to the company's stock price.
In Q2 2022, Netflix currently expects to lose around 2 million subscribers. This is due to a worsening global financial situation, the war in Ukraine, and rising fuel prices. Netflix's recent price increases in many nations, including the UK and US (more info here), will certainly not help matters. Many Netflix subscribers are currently downgrading or cancelling their subscriptions for economic reasons.
Netflix currently has 221.64 million subscribers worldwide.
Password sharing and adverts
Netflix is now planning to crack down on password sharing, confirming that they are not testing new tools to detect the practice. Netflix has estimated that 100 million households benefit from password sharing, a practice that the company previously encouraged.
Neflix's CEO, Reed Hastings, has also confirmed that the company is looking into a cheaper ad-supported plan for users. This plan would allow Netflix to offer their services at a lower price point. Netflix plans to offer this option as "a consumer choice", within the "next year or two".
Increased pricing, greater competition, and a worsening global financial situation is starting to hit Netflix's subscriber numbers, and Q2 2022 is expected to be worse than Q1 2022 in this regard.