Netflix lost subscribers during Q1 2022, marking the first time in more than a decade that this has happened. The streaming giant lost over 200,000 subscribers during the quarter, and the losses show no signs of abating.
Netflix disclosed the subscriber drop in its earnings results on Tuesday. The streamer was expecting to add 2.5 million subscribers in the first quarter of 2022, but it missed that target. The company said suspending operations in Russia cost it 700,000 subscribers. Taking that number out of the calculations, the streamer would have added 500,000 paid subscribers around the globe, which still falls short of Netflix’s expectations.
Netflix lost 600,000 customers in the United States and Canada, due to recent pricing changes. The company said this subscriber loss was anticipated and in line with expectations.
In a letter to shareholders [PDF], Netflix said that revenue growth has “slowed considerably.” The company is blaming “a large number of households sharing accounts” and “competition” as reasons for the drop-off in subscriber numbers. The streaming service estimates that the 222 million paying households are sharing their account with an additional 100 million households that are not paying for the service.
(Sure, it could be due to sharing, but Netflix has also likely lost subscribers due to its raising the monthly subscription fees several times over the past few years, or due to a lack of attractive content.)
Netflix says that going forward it will put in place a “more effective monetization of multi-household sharing,” indicating that Netflix will soon put measures into place to prevent sharing. Netflix is currently testing an extra payment for Netflix subscribers that share their accounts with viewers outside of their households in Chile, Costa Rica, and Peru. When it launched the test, Netflix said that it was working to “understand the utility of these two features” before making changes in other countries.
Netflix recently put in place new price hikes, and now charges $9.99 for its SD plan that allows for streaming on a single device, $15.49 for a Standard HD plan that allows two people to simultaneously watch the company’s streams, and $19.99 for its Premium Ultra HD streaming plan, which allows four simultaneous viewers.
Netflix anticipates losing an additional two million paid subscribers in the second quarter of 2022. To help stem that tide, Netflix co-CEO Reed Hastings said that in addition to addressing password sharing, the company is also considering a more affordable, ad-supported plan.