Netflix Loses 1 mln Subscribers in Q2, 1 mln Less Than Forecasted

In its new earnings report, Neflix announced it had lost nearly one million subscribers in the second quarter of 2022.

That’s the largest loss the company has ever experienced, even though it is far less than the two million Netflix forecast in its Q1 report in April. At that time, the streaming giant announced that it lost 200,000 subscribers in Q1 and expected to lose many more in the second.

As of today, Netflix has about 220.7 million subscribers worldwide. Trying to appease investors, Reed Hastings, a Netflix co-chief executive, told his company could add back one million in the coming quarter. In a letter to shareholders, Netflix said it would keep its focus on providing streaming content to subscribers and not worry about other potential revenue streams, as its primary competitors do. The letter reads:

This freedom means we can offer big movies direct to Netflix, without the need for extended or exclusive theatrical windows, and let members binge-watch TV if they want, without having to wait for a new episode to drop each week. This focus on choice and control for members influences all aspects of our strategy, creating what we believe to be a significant long-term business advantage.

Now, the company suggests two ideas trying to support its cash flow and revenue.

1) In April, Neflix announced it would introduce a new type of subscription — a less expensive one that will feature advertising. It intends to start its lower-cost advertising tier in the early part of 2023 in a “handful of markets where advertising spend is significant".

2) Netflix also promised to crack down more forcefully on password sharing, which it considers a serious issue. The company believes it prevents it from monetizing the 100 million users who use its service without paying for it. Currently, the streaming giant is experimenting with two approaches in Latin America. One allows customers to “add extra member,” and the other allows users to “add a home” for an extra $3 a month.

The company also laid off about 450 employees in May and April.