Netflix Is Losing Subscribers So of Course Bringing in Ads Is the Answer

Netflix Is Losing Subscribers So of Course Bringing in Ads Is the Answer
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Netflix may finally, actually, for real this time, have to crack down on password sharing. Mostly because it’s down on subscribers for the first time in its history.

On Tuesday, the OG streaming giant announced that it is losing, rather than gaining, subscribers for the first time in a decade in a letter to shareholders. To be exact: 200,000 subscribers have fled the platform which went from 221.84 million paying members last quarter to 221.64 this quarter.

The company further projected that its customer base will continue to shrink next quarter, down to an estimated 219.64 million people.

Following the release of the letter, Netflix’s stock tanked, with share values dropping by more than 25 per cent at the time of writing this.

The company largely blamed the membership loss on competition and its existing success (i.e. there’s no new customers left). “Our relatively high household penetration – when including the large number of households sharing accounts – combined with competition, is creating revenue growth headwinds,” Netflix wrote in the shareholder letter.

But the company also estimated that, on top of its more than 222 million paying subscribers, an additional 100 million households are leaching their Netflix content via password sharing — contributing to the losses. In response, the company is threatening to crack down on password sharing, stating that they’re working on the “monetisation of multi-household sharing.”

So, if you want to be able to access that sweet, sweet Netflix original content long into the future, maybe its time to give up your friend-of-a-friend’s login info? (Gizmodo neither endorses nor denounces this idea.)

Finally, as with every good corporate announcement ever, Netflix blamed some of the losses on factors beyond their control. The letter lists “sluggish economic growth, increasing inflation, geopolitical events such as Russia’s invasion of Ukraine, and some continued disruption from COVID,” as partially responsible for the company’s subscriber downturn. The company said it lost about 700,000 Russian subscribers when it suspended service there.

Though total subscribers fell, Netflix still reported a quarterly revenue growth of almost 10 per cent. So, on second thought, maybe you can hold onto your ex-uncle’s password after all.

This article has been updated since it was first published.