Here's Why Netflix Lost Nearly 1 Million Paid Subscribers In Q2 Of 2022

The drop in the number of subscribers of Netflix was seen from April through June this year.

By Ashita Singh
Wed, 20 Jul 2022 11:31 AM IST
Minute Read
Here's Why Netflix Lost Nearly 1 Million Paid Subscribers In Q2 Of 2022
Netflix lost 1 million subscribers in Q2 of 2022. (Pic -Reuters)

Netflix Inc. on Tuesday lost as many as 1 million paid subscribers in the second quarter of this year. The drop in the number of subscribers was seen from April through June this year.

In the second-quarter earnings report, the company revealed that it lost 9,70,000 subscribers, which is more than the 2,00,000-member decline from the first quarter. However, it is by far the largest quarterly subscriber loss in the company’s 25-year history.

"The second quarter was better-than-expected on membership growth, and foreign exchange was worse-than-expected (stronger US dollar), resulting in 9 per cent revenue growth (13 per cent constant currency)," the company said in a statement.

"Our challenge and opportunity are to accelerate our revenue and membership growth by continuing to improve our product, content, and marketing as we have done for the last 25 years, and to better monetise our big audience," it added.

Now, according to the streaming giant, the reason behind the loss of this many subscribers in Q2 was tougher competition as rivals including Disney, Warner Bros Discovery and Apple Inc invested heavily in their own streaming services and soaring inflation that's squeezing household budgets.

Netflix said it had further examined the recent slowdown, which is attributed to a variety of factors including password-sharing, competition and a sluggish economy.

"Our excitement is tempered," Chief Executive Reed Hastings said in a post-earnings interview posted on YouTube, given that Netflix still lost subscribers. "But looking forward, streaming is working everywhere. ... We're very bullish on streaming."

Hastings credited new episodes of the science-fiction series "Stranger Things," the most-watched English-language show in Netflix history, with helping to stave off more defections. In a desperate act to boost revenue, Netflix also announced that an ad-supported plan and the crackdown on password sharing will begin early next year.

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