• Netflix lost over 1 million subscribers in second quarter

    Sci & Tech
    Netflix lost over 1 million subscribers in second quarter

    Netflix officials stated that the firm would become more strict about sharing logins and passwords....


    Digital Desk: Netflix reported on Tuesday that it lost subscribers for the second consecutive quarter as it faces tough competition and stagnant demand.


    However, the most recent quarter's loss of 970,000 paying users was less than expected, leaving the company with just around 221 million subscribers.


     "Our challenge and opportunity are to accelerate our revenue and membership growth... and to better monetize our large audience," the company stated in its earnings report.  


    Following years of user growth, Netflix lost 200,000 customers globally in the first quarter compared to the end of 2021, which sent its share plunging.


    The streaming giant responded by announcing the introduction of advertising on the platform, with the objective of promoting money for the investments required to keep its position as the established market leader.


    While the results were better than anticipated, analysts remarked that they were still not encouraging.


    "Netflix's subscriber loss was predicted, but it remains a pain point for a company that is entirely dependent on customer subscription revenue," said analyst Ross Benes.


    "Unless it finds other franchises that appeal to a broad audience, it will eventually struggle to maintain its lead against rivals vying for its crown," Benes added.


    Netflix officials stated that the firm would become more strict about sharing logins and passwords, which allow many individuals to access the platform's content without paying.


    In a blog post published on Monday, Chengyi Long, director of product innovation, said that it was good that Netflix subscribers enjoyed their movies and TV episodes so much that they wanted to recommend them to others.


    "However, the extensive usage of account sharing among households today compromises our capacity to make long-term service improvements and investments," he added. 


    The "add a house" function, which Netflix started testing in March in Chile, Costa Rica, and Peru, will now be available in Argentina, the Dominican Republic, Honduras, El Salvador, and Guatemala, according to Long.


    To attract new users, Netflix will collaborate with Microsoft to develop a lower-cost subscription option that includes advertisements.


    After a dismal first quarter in which it lost customers for the first time in a decade and years of opposition to the whole idea of showing commercials, Netflix decided to build a less expensive service.


    In addition to the current three alternatives, the ad-supported membership will also be available; the least expensive one is $10 per month in the US.


    Microsoft will create and operate the platform for advertisers interested in serving advertising to Netflix viewers.