Netflix loses 200,000 subscribers after Ukraine-linked Russia pullout
It lost 700,000 viewers in Russia, although it added 500,000 elsewhere globally.
The drop comes amid a larger trend of shrinking viewership, with the streaming service projecting that it will lose a further 2 million subscribers in the next three-month quarter ending in June.
It still said revenue would grow to almost $8 billion in that period, a 10 percent increase from the same time last year. The company also retains a paying audience of over 220 million, more than double what it had five years ago.
But the unexpected drop in paying viewers — the company had said in January it expected paying customers to increase by 2.5 million — reflects a steady slowdown in business. The company cited increased competition and a fizzling of the pandemic-triggered growth in paying viewers, which pushed more people toward at-home entertainment options.
To address the slump, Netflix said it would seek to monetize the millions of nonpaying viewers who have benefited from account sharing. The company estimates that 100 million households, including over 30 million in the United States and Canada, are sharing accounts.
“[Account sharing]’s not a new thing,” said Reed Hastings, Netflix co-chief executive, speaking to investors via video. “We’re working on how to monetize sharing,” he said. “Remember, these are 100 million households that already are choosing to view Netflix. They love the service. We just got to get paid.”
The company is experimenting with two paid sharing features in Chile, Costa Rica and Peru that are aimed at persuading existing account sharers to start paying small sums of up to $3.
Hastings also acknowledged robust competition. “We got great competition. They’ve got some very good shows and films,” he said without naming rivals or movies. “What we got to do is take it up a notch.” In its letter, Netflix listed Disney Plus as one of the “traditional entertainment companies” to realize “streaming is the future.”
Over the long run, Netflix said it sees growth coming mostly from outside the United States. It will focus on producing content that “can be made anywhere and loved everywhere,” Netflix said, pointing to non-English-language hits produced outside the United States such as South Korea’s “Squid Game” and “All of Us Are Dead” and Spain’s “Money Heist.”
The company recorded $1.6 billion in net income during the January-March period, up from $607 million reported in the October-December 2021 quarter, but roughly a 6 percent drop from last year’s first quarter. Its revenue was nearly $7.9 billion, a 10 percent jump from the same period last year.