Netflix has confirmed that for the first time in more than a decade, it has lost subscribers.
In its latest earnings report, the company revealed that it dropped 200,000 net paid subscribers in Q1 2022. According to Netflix, this drop is due to the suspension of its business in Russia, which led to a loss of 700,000 subscribers. Had that not happened, Netflix claims it would have had 500,000 net additions in Q1 2022.
In any event, the streamer says it expects to lose another two million in the second quarter.
“Our revenue growth has slowed considerably,” wrote Netflix in an April 19th letter to shareholders. “Streaming is winning over linear, as we predicted, and Netflix titles are very popular globally. However, our relatively high household penetration — when including the large number of households sharing accounts — combined with competition, is creating revenue growth headwinds.”
Previously, Netflix has expected to add 2.5 million net subscribers during Q1 2022, with analysts predicting around 2.7 million. For context, Netflix added 3.98 million paid users this time last year.
Revenue, meanwhile, came in at $7.87 billion USD (about $9.33 billion CAD), slightly under analysts’ expectations.
Netflix says it now has 222 million paying households. Interestingly, the company claims more than 100 million additional households are using the service through account sharing. The streamer announced earlier this year that it will test a paywall on password sharing in select foreign countries, although it claims there are no current plans to do this in Canada.
The company also recently raised prices — for a second time in Canada within 2 years — which contributed to a loss of 600,000 subscribers in the U.S. and Canada during the most recent quarter. This was “largely the result of our price change which is tracking in-line with our expectations,” Netflix said.
One of the company’s efforts to diversify its catalogue is the recent launch of Netflix Games, although it’s unclear how many people are currently playing the mobile-only titles.
Update: 19/04/2022 at 5:04pm ET: Updated with more information from Netflix’s release.