Netflix has lost a million paid subscribers in the past three months, but it’s not as bad as expected, thanks to its hugely popular series Stranger Things 4.
Netflix expected to lose two million subscribers this quarter. Asked what drove the better-than-expected results, streaming company CEO Reed Hastings said, “If there was one thing, we could say Stranger Things“.
In the first three months of 2022, Netflix saw its first quarterly decline in paid subscribers since 2011. The company lost 200,000 paid subscribers and predicted it would lose two million in the next quarter.
Netflix has lost 800,000 paying members in Europe
This quarter, Netflix lost 1.3 million paying subscribers in Canada and the United States, its biggest market, where it now has 73.28 million paying members. It lost 800,000 paying members in Europe, where it now has 72.97 million paying members.
While the number of paying members in Europe is now almost equal to that of the United States, the average revenue per member in North America is $15.95, compared to $11.17 in Europe.
However, Netflix gained 1.1 million paid subscribers in Asia-Pacific, where it now has 34.8 million, and 800,000 new paid subscribers in Latin America, where it now has 39.62 million.
In France, a gain of more than 3.3 million subscribers since the end of 2020
Although it lost fewer subscribers than expected and remains the largest video streaming service, the move comes as rivals add new subscribers. Disney announced in May that it had added 7.9 million new subscribers to Disney+ in the three months to April, giving it 87.6 million subscribers worldwide. In May, Paramount also said it added 6.8 million users to its Paramount+ service during the quarter, giving it 40 million subscribers.
In France, Netflix has just passed the milestone of 10 million subscribers. A gain of more than 3.3 million subscribers since the end of 2020, the date of Netflix’s last communication for France. And Netflix leaders explain that a household represents 5 accounts, potentially 50 million users, or 75% of the French population.
Netflix released its numbers a week after announcing its ad-supported subscription in partnership with ad network Microsoft.
Subscription with advertising will be launched in early 2023 and is aimed at members who have recently abandoned their subscription or are about to do so, as well as those who share the password of a other person.
Netflix said it was still considering how to monetize the more than 100 million households that are not paying for Netflix due to password sharing.
The company this week announced a new model to combat password/account sharing, which is currently being tested in Latin America. It is already testing the “add an additional member” option in Chile, Costa Rica and Peru and next month it will offer a new “add a household” option. This way, each Netflix account only supports one household, but an additional household can be added for $2.99 per month per additional household. The Basic plan allows you to add one additional household, the Standard plan allows you to add two, and the Premium plan allows you to add three.
This system will be tested in Argentina, the Dominican Republic, El Salvador, Guatemala and Honduras. Netflix said it would not introduce similar changes in other countries, but may do so in 2023. “Our goal is to find an easy-to-use paid sharing offering that we believe works for our members and our business, and which we can deploy in 2023,” the company said in its letter to investors.
Netflix cited account sharing as one reason for slowing revenue growth. The company’s second-quarter 2022 revenue of $7.97 billion was 8.6% higher than the same quarter a year earlier.
Netflix forecasts 4.7% year-over-year revenue growth in Q3 2022 and expects to gain one million new paying members in the quarter. Netflix users can expect the service to offer more animated content in the future after announcing that it will buy Australian animation studio Animal Logic.
Source: “ZDNet.com”