As part of its quarterly earnings report, Netflix revealed that it lost 200,000 subscribers in the first quarter of 2022.
Netflix now has 221.64 million global subscribers, and the firm earned a net income of $1.6 billion on revenues of $7.8 billion in the quarter. Revenues were up 9.8 percent, but the quarter was also the first in which growth fell below double digits.
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“Our revenue growth has slowed considerably as our results and forecast below show,” a Netflix letter to shareholders begins. “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.”
According to Netflix, the service got an unexpected boost from the COVID-19 pandemic, which “obscured the picture until recently.” The firm says it will try to reaccelerate revenue growth through service improvements and more effective monetization of multi-household sharing, meaning that it will no longer let families share a single account for free.
Increased competition has taken a toll, too. While Netflix has the single best content library by far, YouTube, Amazon, and Hulu have maintained their market positions, and Disney has almost doubled its share—granted, to just 1.7 percent of total U.S.-based viewing time—in the past year.
“Key to our success has been our ability to create amazing entertainment from all around the world, present it in highly personalized ways, and win more viewing than our competitors,” the letter explains. “These are Netflix’s core strengths and competitive advantages. Together with our strong profitability, we believe we have the foundation from which we can both significantly improve, and better monetize, our service longer term.”
dftf
<p>Not surprising — there are simply <em>too-many </em>subscription-services in the market now. They might all <em>only</em> ask for around "£11.99 a month" (or whatever, in your local currency) but they soon all add-up!</p><p><br></p><p>A<em> Lloyds Bank </em>survey in the UK did recently report 1.2 million subscription-services cancelled since summer of 2021, with music, TV and movie streaming-services overwhelmingly the main ones to be culled. Source: <strong>moneysavingexpert.com/news/2022/04/over-1-million-subscriptions-ended-by-customers-feeling-the-sque/</strong></p>
dftf
<p>Was this not what people have been doing for years now… sign-up, binge, then cancel?</p>
dftf
<p><em>YouTube </em>creators moan endlessly about "low views", "sub-counts not rising" or "people not subscribed". (They also all ask people to "like, comment and subscribe" as the YouTube AI apparently picks-up on those phrases in a video, and you get higher-ranking for encouraging user-engagement).</p><p><br></p><p>Low-views they attribute to <em>YouTube</em> deliberately de-ranking them in the algorithm, and for sub-counts not rising, they claim <em>YouTube </em>removes some of their subscribers, often citing they are "bot sign-ups". Personally, I suspect it is more a case of simply "the creator is putting out boring content no-one gives a f**k about", hence why they’re seeing a period of low-views and people not subscribing!</p><p><br></p><p>The last issue though (people watching without being a channel subscriber) is hard to address as <em>YouTube</em> has a website, and doesn’t require sign-in to watch videos (unless they are flagged as adult-content). So nothing is stopping people currently from just bookmarking their favourite channels and viewing them without a Google Account. The only way to force people to subscribe (or at-least use an account) would be for a creator to mark all their videos as "suitable for adults only", but such videos are not eligible for monetisation. So it’s not really worth it.</p><p><br></p><p>(I think the whole thing about how-many subscribers a channel has too is meaningless — many of them will be from long-dead Google accounts from old devices, or where passwords have been forgot. I’d prefer to see <em>YouTube</em> change it to "active subscribers", and only count how-many people are regulars to a channel. I mean, right-now you can see some channels with something like 2 million subscribers, but on-average their videos get something like 50-100k views and around 300-500 comments. So clearly not all of those 2 million subs are active.)</p>