As projected by the streamer, it’s a worse loss than the 200,000 suffered in Q1.
Netflix has posted a near-one million subscriber loss for the second quarter (April-June) of 2022.
Releasing its Q2 financial results today, the streaming giant showed a loss of 970,000 net paid subscribers.
The outcome is far better than what Netflix forecast however, having expected a loss of two million subscribers when it revealed its Q1 results (January-March) earlier this year.
There, the streamer revealed its first net loss since 2011, having lost 200,000 users.
The company posted total revenue for Q2 of US$7.97 billion (A$11.5 billion), which was up 9%.
Analysts however expected total revenue to be slightly larger at US$8.04 billion (A$11.6 billion).
Netflix’s biggest subscriber loss came from its biggest market, the United States and Canada, where the streamer said it lost 1.3 million users in the second quarter. But that was ultimately offset by increased subscriptions elsewhere.
Nevertheless, investors were satisfied with the results, as Netflix shares jumped as much as 8% in after-hours trading.
Netflix co-chief executive, Reed Hastings, said:
“It’s tough losing one million subscribers and calling it a success.”
Projecting that linear TV would continue to diminish within the next ten years, Hastings asserted that Netflix’s near term goal would be to re-accelerate revenue growth to evolve and improve monetisation.
He said:
“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 through both continued optimization of our pricing and tiering structures as well as the addition of a new, lower-priced ad-supported tier.”
He also addressed trialled changes to crack down on password sharing.
He said:
“We’re in the early stages of working to monetize the 100 million+ households that are currently enjoying, but not directly paying for, Netflix. We know this will be a change for our members. As such, we have launched two different approaches.”
The two approaches include a new ad-supported and cheaper subscription tier (expected in early 2023), and charging extra monthly fees to subscribers who share their account details with other households.
As to Q3 (July-September), Netflix instead expects a growth in net subscribers of one million.
The fourth volume of popular Netflix series Stranger Things is credited for softening the blow for subscription losses in the last quarter.
The science fiction-horror-drama program is the service’s most popular English-language series.
The new volume was released in two batches (May 27 and July 1), likely meaning fans who paid for Netflix in the second quarter would keep their subscription until the very beginning of the third quarter to finish with the final two episodes.
