Several years ago, Netflix emerged as a pioneer or at least one of the stronger pioneers in the range of video streaming services. The big “N” conquered the entire world offering a huge portfolio of movies and shows at just a few clicks and for an affordable monthly installment. Over the years, the company consolidated its name in the industry with its Originals and set standards for the business. After Netflix, many giants of streaming emerged such as HBO Max, Disney+, Amazon Prime, and others. With the increasing competition, it’s natural to see Netflix losing appeal, still, the company never had significant losses… until now. According to a recent report, the big N lost subscribers for the first time in more than a decade in the first quarter of 2022. The company shared the fact during today’s earning results.
According to the report, Netflix is down more than 200,000 subscribers and the losses are set to continue. It’s not hard to imagine dozens of reasons for this. The company saw a peak in users amidst the pandemic when people were forced to stay at home. However, in the last year, it has increased its prices across the world and there is global inflation floating amidst the war. It’s natural for some people to prioritize essential goodies, and some may also pick other streaming services. Netflix is no longer the only giant in this segment, and the other services have great quality and sometimes more benefits for more affordable prices. Honestly, it’s still shocking to see Netflix locking 4K to the highest option in its prices. The company, however, believes that the big culprit is “account sharing”.
Netflix lost nearly 1 million subscribers from Russia
Netflix was expecting more than 2.5 million subscribers in Q1 2022. However, it’s far from this target. The suspension of the business in Russia made it lose around 700,000 subscribers. Without this loss, the company would have more than 500,000 paid global users and that is still way below the company’s expectations.
The company will raise efforts against account sharing
Worth noting, that in the US and in Canada, the company lost around 600,000 customers. The local media says that it’s a direct reflection of the company’s pricing changes. Netflix, however, said that this loss was anticipated and in line. Now, in a note to shareholders, Netflix states that the revenue growth has slowed. The company is faulting the “large number of households sharing accounts” and also the “competition”. Recently, Netflix started to test a way to monetize account sharing. Now, we can only expect the company to raise its efforts. After all, Netflix estimates that it’s 222 million paying users are sharing accounts with an additional 100 million householders that aren’t monetized.
In the future, Netflix expects to implement “more effective monetization of multi-household sharing”. This is almost a declaration of war against users sharing their passwords. In Peru, Costa Rica, and Chile. Customers can pay an extra fee to share their accounts with two people outside of their household. When the test was launched, Netflix says it was working to “understand the utility of these two features.
The company is also trying to establish its presence in the games segment, and that may see a good way to differentiate its service in the future.