Netflix lost 2 Lakh Subscribers in 3 months, 100 mn families worldwide shared password: Netflix

Netflix: Netflix lost 2 Lakh Subscribers in 3 months
Netflix (Image: Canva)

Netflix‘s share price fell 34.95% to $229.11 on Wednesday since the company’s earnings report was released after the market close on Tuesday, and it wiped more than $50 billion from the firm’s market value.

Netflix lost 2 lakh subscribers in the recent quarter 1 financial year 22, which is less than their forecast of adding 2.5 million subscribers. Earlier in October 2011, Netflix had lost 800,000 subscribers after unveiling plans to start charging separately for its then-nascent streaming service.

Netflix’s management said that suspending services in Russia, password sharing, and growing competition from companies like Amazon World, Disney, etc. are its key reasons.

According to Netflix, approximately 100 million households worldwide share their passwords, including those in the U.S. And Canada includes 30 million.

And when Netflix raised prices for the service in Peru, Chile, and Costa Rica, the company said it was testing steps to eliminate password sharing between households.

Apart from this, post-pandemic, many people are also getting their subscriptions canceled because they now want to go to the theater and enjoy the movie experience.

Netflix also projected that it would shrink by another 2 million subscribers in Q2 FY22.

Netflix will also have to continuously increase its production budget for fresh content which is again a challenge. Netflix cited password sharing as the main reason for the drop in paid subscribers.

Famous investor Bill Ackman’s firm bought 3.1 million shares in January and sell-off its Netflix Entire stake in less than three months, booking a loss of almost $430 million.

Bill Ackman said that due to recent events, he is not able to predict the future prospects of the company with absolute certainty.

In Quarter 1 FY22, Netflix lost 640,000 subscribers in the US and Canada. Netflix had 221.6 million subscribers worldwide as of March 2022 and Netflix remains the world’s leading streaming service with over 220 million subscribers.

The Netflix company had to suspend its services due to Russia’s invasion of Ukraine, which resulted in the loss of 700,000 subscribers. It also lost 300,000 customers in Africa, Europe, and the Middle East, and the company announced that it had lost customers for the first time in a decade.

As a result, revenue grew by $7.8 billion in Q1 FY22, up 9.8% over Q1 FY21, and profits fell more than 6% to approximately $1.6 billion.

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