Netflix Loses 200,000 Subscribers, Counts Password-Sharing as Contributing Factor

By Dasblog

Netflix Loses 200,000 Subscribers, Counts Password-Sharing as Contributing Factor

James Martin/CNET

Netflix lost 200,000 subscribers in the latest quarter, missing its prediction of adding 2.5 million users in Q1 2022.

Netflix, the world’s pioneer streaming-video subscription service, said subscribers dropped from 222 million to 219 million from Jaunuary through March, according to its Tuesday report of first-quarter earnings. And Netflix’s guidance for the second quarter fell short of analysts’ expectations, with Netflix predicting it will shed approximately 2 million subscribers next quarter versus the 2.6 million consensus analyst estimate. The company has glum expectations, despite major releases in the spring, including Stranger Things and the series finale of Ozark. 

Analysts’ consensus expectation was for Netflix to add 2.6 million, according to Refinitiv. 

In its report, Netflix noted that Russia’s war in Ukraine and subsequent sanctions affected membership numbers. “The suspension of our service in Russia and winding-down of all Russian paid memberships resulted in a -0.7m impact on paid net adds; excluding this impact, paid net additions totaled +0.5m.,” the company said in statement. 

Additionally, Netflix to password-sharing in multiple households as another factor impacting its bottom line. “Account sharing as a percentage of our paying membership hasn’t changed much over the years, but, coupled with the first factor, means it’s harder to grow membership in many markets – an issue that was obscured by our COVID growth,” the report states. According to Netflix’s estimates, roughly 100 million additional households are sharing accounts with its 222 million paid users. 30 million of 

After it enjoyed surges in popularity early in the pandemic from people stuck at home and desperate for entertainment, Netflix’s subscriber growth has been volatile for more than a year. The company even lost members in the US and Canada — its biggest single market — during one quarter last year for the first time since 2019. 

Netflix has also faced a wave of competition from new rivals like Disney Plus and HBO Max, as media and tech giants have launched their own services to take on Netflix as television transitions to a future of streaming. Netflix’s rare subscriber loss in the US and Canada hinted that the new competition, which is centered in the US, may be pressuring Netflix’s membership growth there. 

Shares fell 25% after hours. Through the close, Netflix stock dropped 40% so far this year.

Overall, Netflix reported a profit of $1.6 billion, or $3.53 per share, compared to $1.7 billion, or $3.75 cents a share, a year earlier. Revenue rose 10% percent to $7.87 billion. 

Analysts on average expected per-share profit of $2.90 — bullish compared with Netflix’s guidance of $2.86 — and $7.93 billion in revenue. Looking ahead, Netflix also predicts $3 per share in earnings in the second quarter. On average, Wall Street analysts who track Netflix expected $3. 

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