Netflix loses 970,000 subscribers in Q2 2022, beating expectations of a 2 million loss


In the second quarter, Netflix announced a subscriber loss of 970,000, which was significantly lower than the 2 million loss that was anticipated.

Despite the fact that the streaming juggernaut finished the period with a net loss of customers, it anticipates adding 1 million users during the third quarter.

It is important to keep in mind that Netflix addressed the weak revenue increase in the second quarter, blaming it on competition, account sharing, and other reasons like slow economic development and the war in Ukraine.

Although the streaming service has not commented on the recent reduction in members, industry analysts feel that it can be attributed to the rise in the number of other streaming services. Netflix's catalog of movies, television programs, and even video games will become more limited as more production companies launch their own online streaming services, such as HBO Max, Disney+, Hulu, and Amazon Prime Video.

Additionally, the streaming service said that its lower-cost, ad-supported tier will be available to customers beginning in the year 2023. This comes as a result of Netflix's recent decision to work with Microsoft on its ad-supported product.

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An ad-supported tier is one of the options that Netflix is contemplating considering the recent decline in the number of customers it has. Advertising is another component of the company's efforts to hold on to the customers it already has.

However, the streaming platform is keen on maintaining its base of unpaid subscribers, and it has placed some of the responsibility for the first decline in its subscriber base on the practice of exchanging passwords.

The United States and Canada saw the greatest loss of members at Netflix, with 1.3 million leaving the service. The corporation experienced a loss of 770,000 subscribers in Europe, the Middle East, and Africa while simultaneously acquiring 1,000 paid users in Latin America.

With 1.08 million new customers, the Asia-Pacific area was the region that contributed the most to Netflix's overall gain in subscribers during the quarter.

Additionally, the website has implemented measures to generate revenue from password sharing by charging primary account holders a fee to add users who do not live in their households.

In Argentina, the Dominican Republic, El Salvador, Guatemala, and Honduras, the company plans to implement a new fee structure in August 2022 that will enable users to add an additional "home" account outside of their primary account for a fee of $2.99 per month. This new fee structure will only apply to those countries.

By the year 2023, Netflix anticipates that it will "discover an easy-to-use paid sharing solution" based on these two methodologies all over the world.

During the second quarter, the streaming behemoth posted a net profit of $1.44 billion, representing a 6.5 percent increase over the $1.35 billion recorded in the first quarter. However, it did add that it anticipates the rate of revenue growth to moderate to 4.5 percent by the end of the third quarter.