Netflix lost 200,000 subscribers in the first three months of this year, the first time in a decade that the streamer’s subscription numbers have gone into reverse.
The figure was reported as part of Netflix’s quarterly report for shareholders.
In its letter to shareholders, Netflix blamed the drop in subscriber numbers on a number of factors including a slowdown in the global adoption of connected TV’s and broadband, increased account sharing between households, new streaming services launching and macroeconomic factors including the war in Ukraine and the shutdown of its Russian service.
Netflix said “our relatively high household penetration – when including the large number of households sharing accounts – combined with competition, is creating revenue growth headwinds.”
The streamer said that “in addition to our 222m paying households, we estimate that Netflix is being shared with over 100m additional households” and that this makes subscriber growth difficult. It also pointed out that “competition for viewing with linear TV as well as YouTube, Amazon, and Hulu has been robust for the last 15 years. However, over the last three years, as traditional entertainment companies realised streaming is the future, many new streaming services have also launched.”
Macro factors pointed to by Netflix include “sluggish economic growth, increasing inflation, geopolitical events such as Russia’s invasion of Ukraine, and some continued disruption from COVID are likely having an impact as well.”
The company said its plan now “is to reaccelerate our viewing and revenue growth by continuing to improve all aspects of Netflix – in particular the quality of our programming and recommendations, which is what our members value most.”
Another focus is how best to monetise the 100M+ households using another household’s account.
Jon Creamer
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