Netflix has admitted that it's losing a record number of subscribers, and will need to turn to measures like stricter password-sharing crackdowns to ensure it's numbers go back up.
The streaming giant has had its fair share of bad press over the last year or so. Despite a huge surge in growth during the various lockdowns, multiple price hikes, talk of limiting account sharing, and cancelling shows with little notice have led some subscribers to wonder why they're still bothering with Netflix at all - especially since many around the world are staring down the barrel of a terrifying cost of living crisis.
Shows like Stranger Things 4 will no doubt do their part to keep subscribers invested, of course. Take a look at the first trailer below!
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Netflix revealed in its latest earnings report that subscriptions were down 200,000 in total from last quarter, the biggest loss the streaming service has seen since in nearly 10 years.
It's worth noting that Netflix ended up losing 700,000 subscribers when it opted to suspend it service in Russia in response to the country's ongoing attacks in Ukraine. But the streaming giant also gained another 500,000 subscribers elsewhere during the quarter, resulting in a loss of 200,000.
Leaving Russia aside, that number is still nowhere close to the 2.5 million subscriber gain that Netflix had originally forecast. Worse still, the company is currently forecasting a subscriber loss of 2 million for the upcoming quarter.
Netflix CFO Spence Newman does believe subscription growth will resume later in the year, however.
"I want to make sure there's not a read-through from negative two million paid net adds in Q2 that there's going to be a steady strip-down of negative adds," Newman told investors.
"We're not expecting our revenue growth to reaccelerate before the end of the year, but we will grow revenue, and there will be paid net add growth. As we get to the back half of the year, Ted talked about the stronger slate, we get further away from some of the big price increases, we get into a stronger seasonal period, so I just want to make sure that's understood as you think about the full year even though we're not providing full-year guidance."
Co-CEO Reed Hastings also touched on Netflix's plans to get serious about password sharing - something the company has been toying with for a while. According to Hastings, Netflix had been aware that users were sharing accounts for a while, but that the company's overall growth and subscriber count was so healthy that it wasn't really a priority issue.
Now, with the subscriber numbers ticking down, Netflix believes it's time to get serious. It's not yet entirely clear exactly how the crackdown is going to work, but COO Greg Peters said that Netflix would undergo "a year or so of iterating" before a global rollout.
Just last month Netflix started testing ways of charging users more for password sharing in Chile, Costa Rica, and Peru. It remains to be seen if this is the exact method that will be released globally, or if it'll be tweaked in the coming months.
Topics: Netflix, TV And Film