Netflix’s struggle to grow its subscriber count took a drastic turn in the first quarter of 2022. The company reported a loss of 200,000 subscribers globally compared to the fourth quarter, and forecasts even bigger losses in the future. Netflix estimates that it could lose up to 2 million subscribers in the second quarter.
“Our revenue growth has slowed considerably,” Netflix acknowledged. in his letter to shareholders. “Covid clouded the picture by significantly increasing our growth in 2020, leading us to believe that most of our slowdown in 2021 was due to the spread of Covid.” Netflix ended the quarter with roughly 222 million subscribers, so it’s still the biggest streamer, but it faces a host of challenges.
In January, Netflix announced its first monthly subscription increase in two years. Today’s earnings report contains the fallout: Netflix says it lost 600,000 customers in the US and Canada and that this was “largely the result of our price change, which remains in line with our expectations.”
The streaming giant has recently indicated that it will tighten the screws on customers who share passwords and login information as it seeks to maximize revenue from the users it already has. And it’s no small problem: Netflix now estimates that as many as 100 million households use the service through shared passwords. “It’s harder to grow membership in many markets” as a result of the situation, Netflix said.
The slowdown in subscriptions reflects a more competitive streaming landscape: Netflix is competing with more rival services than ever before, each vying for consumers’ eyes and attention. The competition is also getting cheaper, with Disney Plus announcing plans to offer a lower cost ad-sponsored tier later this year. So it’s no surprise that Netflix’s growth has become more gradual in recent years. In March, the company suspended service in Russia after the invasion of the country of Ukraine. Today’s earnings report says that Netflix lost around 700,000 subscribers as a result.
So what comes next? “Our plan is to re-accelerate our viewing and revenue growth by continuing to improve all aspects of Netflix, particularly the quality of our programming and recommendations, which our members value most,” Netflix said in its earnings letter. . “On the content side, we’re doubling down on story development and creative excellence.” The company pointed out that “on the product side, we recently launched ‘double thumbs up’ so members can better express what they really love rather than just like, allowing us to continue to improve our personalized recommendations and our overall experience.” Netflix also says that international success is critical to its future. “In the long term, much of our growth will come from outside the United States,” the company said.
As it explores new avenues to attract more customers, Netflix has expanded deeper into gaming. Just this week, she announced a partnership with exploding kittens what will produce both a mobile game and an animated series.
To begin with, Netflix never had high hopes of counting new subscribers this quarter. The company projected an increase of 2.5 million subscribers compared to the 4 million it gained in the same quarter a year ago. It provided that insight in January after missing its fourth-quarter growth estimates, even with high-profile original movie releases. red notice Y Don’t look up.
Netflix stock plunged on that news, so it’s no surprise that given today’s results were significantly worse than anticipated, the stock plunged once again in after-hours trading.
This quarter wasn’t loaded with the same great Hollywood entertainment. Instead, Netflix leaned on the return of Bridgerton and other fan favorites.
Divulgation: the edge He is currently producing a series with Netflix.