Netflix suffers alarming 200,000 subscriber loss

Netflix had their Q1 earnings call recently and they’re reporting findings they haven’t seen in over a decade. According to a report, via The Wrap, subscriber numbers were shown to have declined by 200,000 globally in Q1. This large Netflix subscriber loss is the first time this has happened to the streamer in over a decade. This also caused their stock to dip by 20%. In a letter that was released to shareholders, Netflix said, “Streaming is winning over linear, as we predicted, and Netflix titles are very popular globally. However, our relatively high household penetration — when including the large number of households sharing accounts — combined with competition, is creating revenue growth headwinds.” The service previously predicted it would gain 2.5 million net subscribers in its first quarter of 2022 but with this reported loss, it may see a global paid subscriber loss of two million for the second quarter.

A reason being cited for the potential loss has been password sharing with people from outside the household. Netflix has made it clear in the past that they want to crack down on password sharing and it’s something that they’re not letting up on as they reveal exactly how many households are actually swapping the login information. In that same report, Netflix revealed that about 100 million households are sharing passwords. While this has worked out for people who have friends that are willing to share their info, it has caused a major problem for the platform. Because of this, they’re working on ways to stop password sharing as much as they can:

“We’ve always tried to make sharing within a member’s household easy, with features like profiles and multiple streams. While these have been very popular, they’ve created confusion about when and how Netflix can be shared with other households. 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.

Netflix has been toying with the idea of monetizing password sharing, which means subscribers are given an opportunity to share the platform with other people outside the household for a price. They kicked off testing in Latin America last month but it still remains to be seen if this will work globally and if it will fix their subscription bleeding. What is certain is that Netflix is taking these losses seriously and they’re going to do whatever it can to get back on an upward trajectory.

Another reason that some are suspecting could be the cause of subscriber erosion is content. Beyond Ryan Reynold’s The Adam Project, Q1 didn’t see game-changing additions that would get users excited. The upcoming season of Stranger Things and the highly anticipated debut of The Sandman were delayed due to COVID-19 so that did have some impact on their planned schedule. The platform also said that it suffered a 700,000 subscriber loss when it decided to suspend operations in Russia due to the war with Ukraine.

What are YOUR thoughts on Netflix’s Q1 losses? Will stopping password sharing help their bottom line?