Netflix's streak of bad luck continues; loses 1 million subscribers
Netflix has been in a bit of a pickle lately. The streaming giant's financial report has revealed that it lost nearly one million subscribers in the last quarter. This hit comes after the company reported losing users for the first time in a decade in Q1. The only saving grace - losing almost one million is way better than the projected two million figure.
- All is not well at Netflix's headquarters in Los Gatos, California. The streaming giant which once ruled the space with an iron fist is now trying hard to get a grip.
- Two consecutive quarters with a loss of subscribers - that is not something even the worst critics of Netflix would have predicted.
- It still reigns supreme, but how long will it last?
In its Q2 earnings report, Netflix reported a loss of 0.97 million customers, putting its total subscriber count at 220.67 million. US and Canada topped the cancellation chart with over one million cancellations between March-end and June-end. In the Asia Pacific region, however, the company gained nearly 1.1 million members. The company's revenue grew from $7.3 billion in 2021 to $7.97 billion this quarter.
Netflix is used to posting double-digit revenue growth. About the 9% year-over-year growth in the Q2, the earnings report said, "The second quarter was better-than-expected on membership growth, and foreign exchange was worse-than-expected (stronger US dollar), resulting in 9% revenue growth (13% constant currency)."
To counteract the continuous dip in customers, Netflix is all set to launch a new ad-supported tier in early 2023. The ad-supported tier is bound to be cheaper than the existing subscription plans. However, there is a catch. The upcoming offering will not have all the content that is currently available. The effect of this information can only be gauged later.
Netflix has always blamed password-sharing as one of the major causes of subscriber loss. The company is now testing a new way to track the same in Latin America. The new method will prompt a user to pay for an additional "home" if they use their Netflix account on a TV or TV-connected device outside the primary household for over two weeks.
Additionally, there was a time when Netflix enjoyed its 'king of streaming' throne with no challenge. The company's over 220 million subscriber count is still way ahead of the next competitor. However, others are growing. In Q2, its main rival Disney+ gained eight million new subscribers. Paramount Plus and HBO/HBO Max added 40 million and 13 million users during the same period.
In its earnings report though, Netflix is optimistic about the next quarter. It forecast an addition of one million customers. Further, the company expects a 12% year-over-year (YoY) growth in revenue.