Netflix suffered a loss of over 970,000 subscribers in Q2 2022, it was revealed.
It’s the second straight quarter that the streaming giant is forced to reveal a drop in subscribers, after losing 200,000 subscribers in the first quarter of 2022.
However, the numbers, while not good, are better than many analysts had predicted. In fact, the streaming giant itself had issued guidance that it expected a drop of around two million subscribers, so a loss of less than half that might seem like a win of sorts.
Netflix now has a global total of 220.67 million subscribers, down from a record 222 million. The company was also able to report a 9% increase in revenue to $7.97 billion.
In its report to shareholders (opens in new tab)company executives remained optimistic about its prospects for the second half of 2022 and expanded on its plans to bring back subscriber growth.
The report details that Netflix has made “…a key priority for accelerating revenue growth is to evolve and improve our monetization. In the early days of streaming, we kept our pricing very simple with just one plan tier. In 2014, we introduced three price levels to improve segment demand. In the future, we will focus on better use of monetization.”
Some of this will be driven by the so-called Netflix crackdown. In April, executives at the streaming giant said about 100 million households shared a password with another account. Since then, they have pursued two different strategies to solve this problem. First, Netflix tested a system in Chile, Costa Rica, and Peru, where a $2.99 surcharge was added to accounts that wanted to share their credentials outside of the house. Second, it was revealed earlier today (July 19) that the streaming service has started looking for an alternative “add a home” feature in Argentina, Dominican Republic, El Salvador, Guatemala, and Honduras.
The new system gives paying customers the option to add entire families – rather than individual users – to their existing monthly subscriptions for a small fee (currently equivalent to $2.99 / £2.50 / AU$4). On a blog post (opens in new tab) announcing the change, Netflix said members on its basic plan can add one extra home, standard up to two extras and premium up to three extras.
The report praises many of Netflix’s shows, with particular attention paid to the monstrous success of Stranger Things. While this is something the streaming giant won’t be able to rely on in the second half of the year…
Analysis: Not as bad as it could have been…
It seems very strange to consider the loss of over 970,000 subscribers a victory, but that’s how Netflix execs are probably feeling, because they know it could have been much, much worse.
That’s especially true because Netflix has spent the last three months behaving like a company in freefall. After the original loss of subscribers, Netflix went on a wave of cancellations, with high-profile shows like Raising Dion and Space Force getting the axe.
Additionally, executives fired the streaming giant’s director of creative leadership and development for original animation Phil Rynda, and his departure started a bloodbath for planned and current animation projects.
Roald Dahl’s The Twits, which had been announced with great fanfare, was cancelled, as were new series based on Jeff Smith’s beloved comic book series, Lauren Faust’s Bone, Toil and Trouble, and Wings Of Fire, which was being supervised by Ava DuVernay of Selma. Meghan Markle’s animated epic Pearl, the first offering from Netflix’s extremely expensive partnership with the Duchess, was also canned.
This was followed by two rounds of layoffs, and news circulated in the film and TV industry that Netflix was tightening its belt and halting lavish spending plans.
The truth is, there is a reason why the number reported by Netflix is 970,000 and not much, much higher, and that reason is Stranger Things. The show’s fourth season broke records, possibly helped by Netflix’s decision to split the release into two parts, with the second coming out on July 1. Why did Netflix choose this date? These results cover the period through June 30. Next time, they won’t have the Hellfire Club to help them out, so it will be interesting to see if giant movies like The Gray Man or big fantasy projects like The Sandman will be enough to keep subscribers interested.
