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Saturday, September 30, 2023

Loss of subscribers hits Netflix hard, worst hit in 10 years

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Netflixthe company based in Los Gatos, Santa Clara County, has suffered a severe blow to its finances due to the loss of 200 thousand subscribers in the first quarter of the year, a situation that has been reflected in a plunge of its shares, an unprecedented event for the company in more than a decade.

In releasing its financial statement for the first three months of 2022, the streaming leader revealed that it has 221.6 million subscribers worldwide, however, from January to March it lost 200 thousand.

The situation is complicated for Netflix, especially since it announced to its investors that it expects to lose another two million subscribers by the second quarter of this year.

The company's shares had already fallen 40 percent so far this year, however, after the quarterly report, which is due to be made public, caused the stock to plunge 25 percent in post-closing trading.

Password sharing and increasing competition were the main reasons cited by the company for the disastrous situation.

Netflix said that there are about 100 million households that use its service without paying for it, so it is already testing some actions that would allow registering these alternate users, and that, for an additional cost, they can use the platform.

"Our relatively high household penetration, when including the large number of shared household accounts, combined with competition, is creating obstacles to revenue growth," the company told shareholders via a letter.

In addition to our 222 million paying households, we estimate that Netflix is shared with more than 100 million additional households, including more than 30 million in the U.S./Canada region," he said. He added, "In addition to our 222 million paying households, we estimate that Netflix is shared with more than 100 million additional households, including more than 30 million in the US/Canada region.

To these situations, company executives stressed, were added "macro factors", referring to issues such as COVID, and the war between Russia and Ukraine, as well as slow economic growth and rising inflation.

Recently, Netflix stopped providing service in Russia, in addition to suspending all its original productions in that country, in protest against the invasion of Ukraine, an action that cost the company 700 thousand subscribers.

In the face of the disaster, the company's top executives told investors that they are already working on other actions to encourage an increase in subscribers, and not to lose the ones they already have, by improving service and the quality of programming.

 "Our plan is to re-accelerate our viewing and revenue growth by continuing to improve all aspects of Netflix, particularly the quality of our programming and recommendations, which is what our members value most," the company said.

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Pamela Cruz
Pamela Cruz
Editor-in-Chief of Peninsula 360 Press. A communicologist by profession, but a journalist and writer by conviction, with more than 10 years of media experience. Specialized in medical and scientific journalism at Harvard and winner of the International Visitors Leadership Program scholarship from the U.S. government.


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