Netflix lost 200,000 subscribers for first time in a decade, shares plunge 26%text_fields
San Francisco: Streaming giant Netflix has lost 200,000 subscribers in Q1 and expects to lose another 2 million in the current second quarter, the platform said in its first-quarter 2022 earnings release on Tuesday.
This marks the first time Netflix has lost subscribers during a quarter in 10 years. Netflix said that not accounting for the losses in Russia, where the streamer cut services over the country's invasion of Ukraine, it would have added 500,000 subscribers in Q1.
Netflix ended the first quarter of this year with 221.6 million subscribers, slightly less than the final quarter of last year.
In January, Netflix reported it had 221.84 million subscribers at the end of 2021. During the three-month period that ended March 31, a time span that included the debuts of "Bridgerton" Season 2 and "The Adam Project," Netflix says its total fell to 221.64 million subs.
The Silicon Valley tech firm reported a net income of $1.6 billion in the recently ended quarter, compared to $1.7 billion in the same period a year earlier. Netflix shares were down some 25 percent to $262 in after-market trades that followed release of the earnings figures.
"We're not growing revenue as fast as we'd like," Netflix said in an earnings letter.
"Covid clouded the picture by significantly increasing our growth in 2020, leading us to believe that most of our slowing growth in 2021 was due to the Covid pull forward."
Netflix believes that factors hampering its growth include the time it is taking for homes to get access to affordable broadband internet service and smart televisions, along with subscribers sharing their accounts with people not living in their homes.
The streaming giant estimated that while it has nearly 222 million households paying for its service, accounts are shared with more than 100 million other households not paying the television streaming service.
"Account sharing as a percentage of our paying membership hasn't changed much over the years, but, coupled with the first factor, means it's harder to grow membership in many markets," Netflix said.
Netflix last year began testing ways to make money from people sharing accounts, such as by adding a feature that lets subscribers pay slightly more to add other households.