Netflix continues to bleed as it reports its Q2 2022 financial earnings. After announcing that it has lost subscribers for the first time in decades, the company has lost 1.3 million more in the U.S. and Canada.
In its Q2 2022 report, Netflix reveals that the subscriber count has dropped by almost 1.3 million between late March and late June of this year. The Q1 report earlier this April showed that the North American countries comprised 600,000 of the lost subscribers, meaning that the company lost double the number of subscribers in four months but less than what it expected (2 million).
The streaming service now reports that there are 73.28 million subscribers in the U.S. and Canada and 220.67 million worldwide – last quarter’s results showed 222 million. Netflix vows to “accelerate” its revenue, monetization, and membership growth like the last 25 years in a note to shareholders:
“Our challenge and opportunity is to accelerate our revenue and membership growth by continuing to improve our product, content, and marketing as we’ve done for the last 25 years, and to better monetize our big audience.”
The financial report comes after the announcement of a Netflix-Microsoft partnership last week to develop a new ad-supported tier for the service. Noting that the tier of the service will be “more seamless and relevant for consumers”.
“Our hope is to create a better-than-linear-TV advertisement model that’s more seamless and relevant for consumers, and more effective for our advertising partners. Over the long run, we think advertising can enable substantial incremental membership (through lower prices) and profit growth (through ad revenues).”
Netflix has lost 1.3 million subscribers in the U.S. and Canada as it reports in its Q2 2022 earnings. This is double the number of lost subscribers compared to last quarter – 600,000 – as the company estimated a 2 million drop for Q2.$NFLX pic.twitter.com/6eQfu6q9cH
— Heedo Abu Laban | عبد الحميد | 𓂆 (@HeedoAbuLaban) July 19, 2022
In January, the streaming service announced price hikes in the three plans it provides: Basic, Standard, and Premium. Further hikes led to a significant downturn in revenue and subscriber count.
- Basic – $9.99/mo (previously $8.99/mo)
- Standard – $15.49/mo (previously $13.99/mo)
- Premium – $19.99/mo (previously $17.99/mo)
Executives are optimistic regarding the rollout of an “easy-to-use paid sharing offering” to countries such as Chile, Costa Rica, and Peru while the company’s promise to crack down on password sharing is being tested.
The way the company is doing this is by offering subscribers in Argentina, the Dominican Republic, El Salvador, Guatemala, and Honduras to “buy” homes outside the main environment of usage.
The largest reason for the bad news for Netflix is increasing competition. Since 2019, competition regarding streaming services (dubbed the Streaming Wars) has been on the horizon. Apple launched Apple TV+ and has been ever-expanding significantly due to the increased library of premium original content.