Netflix has lost a million paying subscribers in the last three months, but it’s not as bad as expected thanks to the hugely popular Stranger Things 4 series.
Netflix is expected to lose two million subscribers this quarter. Asked what led to the higher-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 experienced a quarterly decline in paying subscribers for the first time since 2011. The company lost 200,000 paying subscribers and predicted it would lose two million in the next quarter.
Netflix lost 800,000 paid subscribers in Europe
This quarter, Netflix lost 1.3 million paying subscribers in Canada and the US, its largest market, which now has 73.28 million paying subscribers. It has lost 800,000 paying members in Europe, which now has 72.97 million paying members.
While the number of paying members in Europe is now almost the same as in the United States, the average income per member in North America is $15.95 compared to $11.17 in Europe.
However, Netflix gained 1.1 million paying subscribers in Asia Pacific, where it is now 34.8 million, and 800,000 new paid subscribers in Latin America, where it is now 39.62 million.
France has over 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 competitors add new subscribers. In May, Disney announced that in the three months to April, 7.9 million new subscribers had joined Disney+, bringing it to 87.6 million subscribers worldwide. In May, Paramount also reported that 6.8 million users were added to the Paramount+ service during the quarter, bringing it to 40 million subscribers.
In France, Netflix just passed the 10 million subscriber mark. An increase of over 3.3 million subscribers since the end of 2020, the date of the last Netflix post 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 an ad-supported subscription in partnership with the Microsoft ad network.
The ad-supported subscription will launch in early 2023 and is intended for members who have recently unsubscribed or are about to unsubscribe, as well as those who share another person’s password.
Netflix said it is still considering how to monetize the more than 100 million households that are not paying for Netflix due to password sharing.
This week, the company announced a new model for combating password and account sharing, which is currently being tested in Latin America. It is already testing the “add additional member” option in Chile, Costa Rica and Peru, and will offer a new “add household” option next month. So each Netflix account only supports one family, but it’s possible to add an extra family for $2.99 per month for each additional family. 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 has said it will not implement similar changes in other countries, but may do so in 2023. “Our goal is to find an easy-to-use paid exchange offer that we think works for our members and our business and that we can roll out. in 2023,” the company said in a letter to investors.
Netflix cited account sharing as one of the reasons for the slowdown in 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 revenue growth of 4.7% year-on-year in the third quarter of 2022 and expects the company to add one million new paying subscribers this quarter. Netflix users can expect the service to offer more animated content in the future following the announcement of its purchase of Australian animation studio Animal Logic.