Netflix Loses Subscribers for the First Time in 10 Years, Blames Account Sharing

[TheSkywalker77]

We’ll just forget about the price increases, removing titles people actually want to watch, and replacing them with originals nobody cares to watch.

But no!! It couldn’t be that!! It’s those damn account sharers!!

 

[Ethosik]

I wish I could buy Stranger Things on iTunes or Amazon or somewhere digitally. I hate being tied to a subscription service to re-watch it. And yes I like to re-watch content a lot, I just watched the first three seasons for the 7th time just a couple weeks ago.

 

[Jeven Stobs]

So perhaps Apple did do well not to purchase Netflix „all those years ago“ and can grab them at a much more affordable price at some point. I for my part would like to see them do so.

 

[TheFluffyDuck]

Netflix lost subscribers for the first time in more than a decade in Q1 2022, according to subscriber numbers the company said during today's earnings results. Netflix is down more than 200,000 subscribers, and the losses are set to continue.

Netflix was expecting to add 2.5 million subscribers in the first quarter of 2022, but did not hit that target. The suspension of its business in Russia cost it 700,000 subscribers, and without that loss, Netflix would have added 500,000 paid global users, which is still well below its projections.

In the United States and Canada, Netflix lost 600,000 customers, due to recent pricing changes. Netflix said this subscriber loss was anticipated and in line with expectations.

In a letter to shareholders [PDF], Netflix said that revenue growth has "slowed considerably," with the company faulting "a large number of households sharing accounts" and "competition" as reasons for the drop off. Netflix estimates that its 222 million paying households are sharing with an additional 100 million households that are not being monetized.

Going forward, Netflix said that it plans to implement "more effective monetization of multi-household sharing," which suggests that Netflix will soon enact measures to prevent account sharing. Netflix in March began testing an extra payment for those who share their Netflix accounts with people outside their households.

In Netflix's current test markets of Chile, Costa Rica, and Peru, customers can pay an extra fee to share their accounts with two people outside of their household. When the test was launched, Netflix said that it was working to "understand the utility of these two features" before making changes in other countries.

Netflix has always included wording in its terms and services that prevents account usage across multiple households, but until now, the service has ignored password sharing. Netflix also recently enacted new price hikes, and a 4K streaming plan is priced at $20 per month.

It's worth noting that Netflix is the only streaming service that charges by streaming quality. In the U.S., Netflix charges $9.99 for the Basic no-HD plan that allows for streaming on a single device, $15.49 for a Standard HD plan that allows for two people to watch at the same time, and $19.99 for a Premium plan with Ultra HD streaming and support for four simultaneous viewers.

In the second quarter of 2022, Netflix is anticipating losing two million paid subscribers. To mitigate the continued losses, Netflix co-CEO Reed Hastings said that in addition to addressing password sharing, the company is considering a more affordable, ad-supported plan within a year or two.

Article Link: Netflix Loses Subscribers for the First Time in 10 Years, Blames Account Sharing

Personally, I blame a lack of mainstream content, region locking, and rising cost.

 

[inkswamp]

 

[rp100]

Account sharing was never an issue until now?

How about...

1. Price increases
2. New content not being released fast enough for binge-watchers
3. End of "lockdowns" and people spending less time in the home
4. More streaming competitors than ever before
5. Moral perception - Netflix dug in their heels with the "Cuties" film (and of any content to die over, they doubled down on something which was construed as child exploitation/pornography!). This pushed away a subset of existing & potential subscribers
6. Content being lost to competing streaming services. Large investors have excess cash and are putting it to work to chip away at Netflix's market share
7. Indirect competition - people are using Youtube, Tiktok, Rumble, Instagram, etc. as alternatives to traditional programming (shows, movies)

 

[MNGR]

Most of this site is like this. Just a bunch of angry Apple users.

Really? Netflix subscriber since ‘98. Tired of their price increases.
But I really appreciate ATV. A lot of excellent content.
And not as much trash as on NF.
And we don’t share the account

 

[rgwebb]

People have been sharing Netflix accounts since the beginning of their streaming platform. What they’re really saying is growth hinges on them creating user hostile systems that prevent account sharing.

 

[MICHAELSD]

My prediction is that the streaming competition will kill Netflix. Or at least dramatically reduce its subscriber base.

 

[szw-mapple fan]

LOL if you think it's just a fad

Not saying the TikTok format is a fad, but that Netflix probably won't really make a dent with their kind of content if they decided to make shows in a similar format. 3-10 minute vertical mini series shows don't work very well as heavily produced content as shown by Quibi. Much better to leave it to free platforms with individual creators.

 

[1madman1]

I was a subscriber since day 1 for Canada, it was little more than a novelty at launch. Stayed for the BBC and Scandi-noir content that started showing up.

I ditched the service a couple years ago because their content shifted and no longer interested me, especially given the pricing. Amazon is the only service I currently subscribe to, and I'm considering adding Youtube.

 

[Thebrochure]

Maybe if it was still $7.99, people wouldn't feel the need to share their passwords.

 

[FreemanW]

What's not to like?

Netflix content sucks, but there's a lot of it.

 

[michaelprescott]

Netflix is racing itself to the bottom quality-wise, while simultaneously flooding their content pool with mess. You can't filter out all the dubbed movies and shows, which are both uncanny and usually copycat junk as well. I think they're focusing on quantity instead of quality, maybe? Seems like a bad long-term business plan. After all, a lot of junk is just a lot of junk, and finding a gem or immersion in a pile of junk is unpleasant enough to drive people away.

I like Apple's approach. Maybe a little slow, but steadily growing their content and focusing on premium quality for a fair price.

 

[nvmls]

Ted Lasso
The Morning Show
For All Mankind
Dickinson
Mythic Quest
Central Park
Tehran
Schmigadoon!
Foundation
Acapulco
Swagger
The After Party
Severance
Slow Horses

All great shows in the past few years of TV+ existence. What has Netflix put out in the same timeframe that was worth the $12-$20 a month fee compared to the extreme value of TV+ measly $5 a month.

Most of Netflix’s great content is so old now or it’s is one or two shows that take forever to get a new season out or about to end/get canceled.

"Great shows" ?

Yes, Netflix stuff is mostly garbage, the amount of great series ruined by profit exploitation is mind bending. Hopefully that's biting them as well as the price hikes. They deserve it sooner than later.

That said, they are still light years away from Apple.

 

[MidwestMacGuy]

Its chock full of garbage. That’s why I fired them.

Disney+ is the only service which actually delivers value.

Actually, HBO Max is pretty awesome. Gobs of content from Warner Brothers at a reasonable price. I watch HBO Max more than Netflix now.

 

[Diablo360]

Price increases and account sharing did it for me

 

[amartinez1660]

I guess it’s a net win, increase the prices, lose some subscribers which means operating costs might be lower (less server bandwidth stream delivery and the likes, but wonder how substantial that is nowadays)…
That trend in the far away future looks nasty, poor those that forget to unsubscribe forever.

“this is a notification to inform you that Netflix is increasing to $5K a month”.

 

[MidwestMacGuy]

What's missing from this version of the story: revenue improved vs. same quarter 1 year ago but fell short of expectations.

Keep in mind too that they suspended operations in Russia which resulted in a loss of 700K paid net additions. Had there been no war-driven action there, they would have added about 500K subscribers in this quarter.

Much like Apple releasing better revenue numbers than expected but then the stock taking a hit, it's expectations that is mostly driving this. The bad news on that front is Netflix expecting to lose about 2M more subscribers this quarter. However, for the next quarter, they are expecting to again (revenue) beat the same quarter from a year ago even with fewer subscribers. How do you do that? One way is the added revenue from price hikes makes a modestly smaller number of subscribers yield more revenue.

So while we will beat them down in this thread, the net result is they are actually making MORE money from modestly fewer subscribers AND taking the stance of actually cutting off certain revenue from Russia. They similarly expect to make MORE money next quarter than year ago too but their projection is not as high as Wall Street would like (sound familiar?) so the stock is taking a pounding today.

Basically "Netflix is doomed! Netflix is doomed!" with about $8 Billion/quarter, 222 MILLION subscribers and their belief that 100 MILLION households are "sharing" access from someone else without paying for it. If that number is real and they cut off up to 100 MILLION people and/or do what they are doing with an extra fee to share with another household in some test countries, what is likely to happen to paying subscriber counts? They add a bunch of new revenue from the people who are not paying for it now... certainly not 100M but it won't take many having to actually pay for the service to completely cover this modest loss of subscribers PLUS the expected 2M. This whole thing is about a fraction of 1% of the whole business.

No particular sympathy for Netflix or anything- just adding some information that might paint a different picture than the simplistic: price hike = devastation... quality of content = devastation.

What is missing is the amount of retail trading where people are making their own decisions. A little bad news causes huge swings in stock price. It is brutal and has turned owning stocks more volatile and not for the weak of heart. If there is good news, there are probably a ton of short sellers that are making a killing right now on Netflix. That only makes the matter worse. It is probably time for some changes in how stocks get traded. But this is a tech site so lets all beat up on Netflix for losing a few subscribers.

 

[abhibeckert]

Netflix said that it plans to implement "more effective monetization of multi-household sharing"

Guilty as charged, a relative has shared their password with us.

But every time I launch Netflix, there's nothing there. All of the shows (or at least, all the ones it recommends to me) are boring. There's no way I'd pay for it if I'm not even willing to watch Netflix for free.

The real problem is they waste money on **** content and all their competitors have exclusive rights to the good content.

If they "effectively monetise" mult-household sharing, people like me will uninstall the app. At least right now I open it once a month to see if the situation has improved. If they had something good, I'd probably subscribe as soon as someone else on the same account wants to watch at the same time as me.

 

[amartinez1660]

Actually, HBO Max is pretty awesome. Gobs of content from Warner Brothers at a reasonable price. I watch HBO Max more than Netflix now.

HBO Max does it for me, I can only watch it when I’m the US (because Canada and multimedia) but it’s a delight… lots of movies, old and new, great series, etc.

Binge watched Succession this last Christmas, gold, what a series for those that hit the proper nerve.

 

[michaelprescott]

What is missing is the amount of retail trading where people are making their own decisions.

I have my doubts that retail traders can move the valuation of a company like Netflix or Facebook by 25% in a single day. These aren't meme stocks in a short squeeze.

401K holders, target plans, pensions, IRAs aren't rebalancing on a whim either. Even if these stocks are indeed a fair percentage, say 2 to maybe 5% of someone's target plan or portfolio. The idea that small-time Robinhood traders are bailing to cause a 25% drop is just really hard to believe.

I wonder, if instead of that, what we're seeing with these absolutely boggling drops is actually board members, big time fund managers, and maybe executives or other early large investors dumping thousands to millions of shares on the market the moment they see the writing on the wall.

It's actually really disturbing, worrisome to see this level of volatility, this level of dumping, which does leave the little guys, the small investors, and the 401K holders, retirees, etc. holding empty bags... at least much lighter bags. It's going to take a while for people to recover (if ever considering that Netflix may be falling out of favor)

 

[Mark Booth]

That said, they are still light years away from Apple.

That's true. Netflix is definitely light years away from Apple TV+!

Mark

 

[Macaholic868]

So if you incessantly raise prices you’ll have fewer subscribers because people are more likely to share an account? In other shocking news water is wet.

 

[tooobe]

After the last price hike, not even WITH account sharing it felt worth it so canceled our families account.