The number of subscribers to the streaming giant Netflix has fallen for the first time in over a decade.
In a statement on Tuesday, the company said it lost 200,000 members in the first three months of the year, primarily as the firm raised prices in strategically important markets such as the US and the UK. It also pulled out of the Russian market following the February 2022 invasion of Ukraine.
Netflix cautioned that it is expecting further losses, and suggested that it would start to take a firmer stance on account sharing in an effort to increase the number of new members subscribing to its service.
The streaming giant estimates that more than 100 million households are breaching the rules by sharing passwords.
Chief executive officer of Netflix, Reed Hastings, explained that when the company was growing fast, it wasn’t a big priority for it to monitor and prevent account sharing. “And now, we’re working super hard on it,” he said.
Drop in subscribers
In a letter to shareholders, widely quoted by international media, Netflix said the rapid increase in subscriptions during the pandemic had “obscured the picture”, warning that another two million subscribers were likely to exit the streaming service in the three months leading up to July.
“Our revenue growth has slowed considerably as our results and forecast below show,” the company said.
“Our relatively high household penetration – when including the large number of households sharing accounts – combined with competition, is creating revenue growth headwinds.”
The last time Netflix lost subscribers in any one quarter was October 2011, however, it still boasts more than 220 million subscribers globally.
The company said that pulling out of Russia, as a result of its war against Ukraine, cos it some 700,000 subscribers, while some 600,000 subscribers were lost in US and Canada after it increased prices.
Netflix also said that the developments are progressing in line with expectations, and would make sense financially in the long run, despite cancellations.
It’s revenues for the first three months of 2022 increased by 9.8 per cent when compared to the same period last year, to hit more than $7.8 billion (€7.2 billion).
This translates into a slowdown from previous quarters, while profits dipped by more than six per cent, to around $1.6 billion (€1.5 billion).
Indeed, it appears that losses for the quarter were partially offset by registrations in other parts of the world, such as Japan and India.
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