Netflix has suffered a loss of over 970,000 subscribers in the second quarter of 2022, it has been revealed.
It’s the second quarter in succession that the streaming giant has been forced to reveal a dip in subscribers, after the loss of 200,000 subscribers in the first quarter of 2022.
However, the numbers, while not good, are better than many analysts had been predicted. Indeed, the streaming giant itself had issued guidance that it was expecting a drop of around two million subscribers, so a loss less than half of that may feel like a victory of sorts.
Netflix now boasts a global total of 220.67 million subscribers, down from the record high of 222 million. The company was also able to report increase a rise in revenue of 9% to $7.97 billion.
In their report to shareholders (opens in new tab), the company’s executives have remained bullish about their prospects for the latter half of 2022 and have expanded on their plans to bring subscriber growth back.
The report details that Netflix has made “…a key priority to re-accelerate revenue growth is to evolve and improve our monetization. In the early days of streaming, we kept our pricing very simple with just one plan level. In 2014, we introduced three price tiers to better segment demand. Going forward, we will focus on better monetizing usage.”
Part of that will be driven by Netflix’s so-called crackdown. Back in April, the streaming giant’s executives stated that around 100 million households shared a password with another account. Since then, they have pursued two different strategies to address this problem. First, Netflix trialed a system in Chile, Costa Rica, and Peru where a $2.99 surcharge was added to accounts that wanted to share their credentials outside the household. Secondly, it was revealed earlier today (July 19) that streaming service has begun looking at an alternative “add a home” feature in Argentina, the Dominican Republic, El Salvador, Guatemala and Honduras.
The new system grants bill-paying customers the option of adding entire households – rather than individual users – to their existing monthly subscriptions for a small fee (currently equivalent to $2.99 / £2.50 / AU$4). In a blog post (opens in new tab) announcing the move, Netflix said members on its basic plan can add one extra home, standard up to two extra and premium up to three extra.
The report heaps praise of many of Netflix’s shows, with special attention paid to the monster success of Stranger Things. Though that is something the streaming giant will not be able to rely on in the second half of the year…
Analysis: Not as bad as it could have been…
It seems very strange to be chalking up the loss of over 970,000 subscribers as a bit of a win, but that is how Netflix’s executives are probably feeling, because they know it could have been a lot, lot worse.
That’s especially true because Netflix has spent the last three months behaving like a company that was in freefall. In the wake of the original loss of subscribers, Netflix went on a canceling spree, with high-profile shows like Raising Dion and Space Force getting the ax.
In addition, executives fired the streaming giant’s Director of Creative Leadership and Development for Original Animation, Phil Rynda, and his departure has kicked off a bloodbath for planned and current animation projects.
Roald Dahl’s The Twits, which had been announced with great fanfare, was axed, as were new series based on Jeff Smith’s beloved comic book series Bone, Lauren Faust’s Toil and Trouble, and Wings Of Fire, which was being overseen by Selma’s Ava DuVernay. Meghan Markle’s animated epic Pearl, the first offering from Netflix’s hugely-expensive team-up with the Duchess, also got canned.
That has been followed by two round-ups of layoffs, and word being put out in the movie and TV industry that Netflix was tightening its belt and stopping lavish spending plans.
The truth is, there’s a reason why the number Netflix reported is 970,000 and not far, far higher, and that reason is Stranger Things. The show’s fourth season has broken records, possibly helped by Netflix’s decision to split the release into two parts, with the second dropping on July 1. Why did Netflix choose that date? These results cover the period up until June 30. Next time, they won’t have the Hellfire Club to help them out, so it’ll 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.