Netflix loses over 200,000 subscribers: Blames password sharing, Russia-Ukraine war and more

It has not been a good year for Netflix, at least not until now. The US-based content streaming platform has announced that it has lost over 200,000 subscribers in the first quarter of 2022 and is predicting a drop of almost 2 million more subscribers in the second quarter. Notably, the company had reported a major boost at the start of the COVID-19 pandemic.

In a letter to shareholders, Netflix wrote, “Our revenue growth has slowed considerably. Covid clouded the picture by significantly increasing our growth in 2020, leading us to believe that most of our slowing growth in 2021 was due to the Covid pull forward.”

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Image: Netflix

Netflix subscribers count plunges: Factors that steered this drop

Netflix pointed out four factors that have affected the growth trajectory of the platform. Netflix reveals that people have realised that streaming is the future, especially in the last three years which has led to the entry of several new players and strong competition from Disney+, Prime Video and more in the market. The company also suggested that it is unable to expand in some countries due to factors that aren’t in its control like smart TV adoption and data prices and the abundance of account sharing feature.

Netflix notes that there are more than 222 million paying households, but another 100 million-plus subscribers share those accounts. As per the official statement, “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.”

Lastly, Netflix suggests that macro factors like “sluggish economic growth, increasing inflation, geopolitical events such as Russia’s invasion of Ukraine, and some continued disruption from COVID are likely having an impact as well”.

Netflix is optimistic: Efforts to turn things around

According to Netflix, it will now focus more on “the quality of our programming and recommendations”, something that the consumers like about the platform. The streaming platform is “doubling down on the story development and creative excellence”. The major shows and series that became big in the first quarter of 2022 include Bridgerton Season 2, Inventing Anna, Tinder Swindler, The Adam Project, Red Notice and Don’t Look Up.

For the unversed, Netflix has recently introduced the “double thumbs up” feature for its users globally to improve the recommendations section on the platform. Netflix says that it will continue to improve our personalized recommendations and overall experience.

Netflix is also testing a “paid sharing” feature for some users in America. As per the official statement, “Early last year, we started testing different approaches to monetize sharing and, in March, introduced two new paid sharing features, where current members have the choice to pay for additional households, in three markets in Latin America. There’s a broad range of engagement when it comes to sharing households from high to occasional viewing. So while we won’t be able to monetize all of it right now, we believe it’s a large short- to mid-term opportunity.”

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Conclusion

Netflix announced that it lost nearly 2 million subscribers in the first quarter of 2022 and is predicting a drop of almost 2 million more subscribers in the second quarter. The company revealed four reasons as to why its subscriber count has plummeted, including increased competition from Disney+, Prime Video, smart TV adoption and data prices