Netflix suffered a loss of more than 970.000 subscribers in the second quarter of 2022, it has been revealed.
This is the second consecutive quarter that the streaming giant has been forced to reveal a drop in subscribers, after losing 200.000 subscribers in the first quarter of 2022.
However, the numbers, while not good, are better than many analysts had predicted. In fact, the streaming giant itself had announced that it was expecting a drop of around two million subscribers, so a loss of less than half might seem like a victory of sorts.
Netflix now has a worldwide total of 220,67 million subscribers, down from a record 222 million. The company was also able to report a 9% increase in revenue to €7.97 billion.
In their report to shareholders (opens in a new tab), company executives remained optimistic about their outlook for the second half of 2022 and expanded on their plans to recapture subscriber growth.
The report details that Netflix has made “…a key priority to re-accelerate revenue growth is to scale and improve our monetization. At the start of the stream, we kept our pricing very simple with a single plan level. In 2014, we introduced three pricing tiers to better segment demand. In the future, we will focus on better monetization of usage."
Some of that will be fueled by the so-called Netflix crackdown. In April, executives at the streaming giant said around 100 million households shared a password with another account. Since then, they have followed two different strategies to solve this problem. First, Netflix tested a system in Chile, Costa Rica, and Peru where an additional €2.99 was added to accounts that wanted to share their credentials outside the home. Second, it was revealed today (July 19) that the streaming service has begun considering an alternative "add a home" feature in Argentina, the Dominican Republic, El Salvador, Guatemala, and Honduras.
The new system offers paying customers the ability to add entire households, rather than individual users, to their existing monthly subscriptions for one low fee (currently equivalent to €2.99 / £2.50 / AU$4). In a blog post (opens in a new tab) announcing the move, Netflix said members on its basic plan can add one additional home, standard up to two additional homes, and premium up to three additional homes.
The report praises many Netflix shows, with particular attention to the monstrous hit Stranger Things. Although it is something that the streaming giant will not be able to count on in the second half …
Analysis: Not as bad as it could have been...
It seems very strange to consider the loss of more than 970.000 subscribers as a victory, but Netflix executives probably feel that way, because they know it could have been much worse.
This is especially true given that Netflix has spent the last three months behaving like a company in free fall. Following the initial loss of subscribers, Netflix launched a series of cancellations, with high-profile shows like Raising Dion and Space Force getting the axe.
Additionally, executives fired the streaming giant's director of creative leadership and original animation development, Phil Rynda, and his departure sparked a bloodbath for planned and ongoing animation projects.
Roald Dahl's The Twits, which had been heralded with great fanfare, was scrapped, as was a new series based on Jeff Smith's beloved comic book series Bone, Lauren Faust's Toil and Trouble and Wings Of Fire, which was overseen by Ava DuVernay from Selma. Meghan Markle's animated epic Pearl, Netflix's hugely expensive team's first deal with the Duchess, has also been cancelled.
This was followed by two layoff raids and rumors circulating in the film and television industry that Netflix was tightening its belt and stopping its lavish spending plans.
The truth is, there is a reason why Netflix's reported number is 970,000 and not much, much higher, and that reason is Stranger Things. The show's fourth season broke records, perhaps helped by Netflix's decision to split the release into two parts, with the second dropping on July 1. Why did Netflix choose this date? These results cover the period through June 30. Next time around, they won't have the Hellfire Club to help them out, so it will be interesting to see if giant movies like The Gray Man or big fantasy projects like The Sandman will be enough to keep subscribers interested.