Streaming giant Netflix has continued to loss subscribers, causing a major worry for the company. On Wednesday, the popular video streaming platform revealed it has lost around a million subscribers in the second quarter (April – June) of this year. The company stated that it lost 9,70,000 members in the second quarter, which is higher than the 2,00,000-member drop in the first quarter.
According to reports, in April, the platform had recorded a 2 lakh paid subscriber loss in the first quarter of 2022, its first in almost a decade. After the second quarter reports, Netflix has only 220.67 million subscribers. “Our challenge and opportunity are to accelerate our revenue and membership growth by continuing to improve our product, content, and marketing as we have done for the last 25 years, and to better monetize our big audience,” the firm said in its official statement. The company added that it expects to add one million subscribers in the third quarter.
It added that the second quarter was better than expected in membership growth, and foreign exchange was worse than expected resulting in 9 percent revenue growth. The company said that it had projected a loss of of 2 million subscribers in the second quarter, but it was restricted to one million.
Overall, the company lost 1.3 million subscribers in the U.S. and Canada, the numbers stayed largely unchanged in Latin America, lost about 770,000 in Europe and West Asia, and grew by about 1 million subscribers in the Asia Pacific region including India. Netflix has 73.28 million paid customers in the United States and Canada, and 220.67 million worldwide, with a million more expected in the third quarter. Revenue climbed by 9% year on year, from $7.3 billion in 2021 to $7.97 billion this quarter.
It is notable that to arrest the decline in subscriber base, the company has decided to launch ‘ad-supported’ cheaper subscription plans from next year. The streaming giant stated that the debut of advertising on the service will aid the company in attaining its financial goal and sustaining its position as the industry leader that it pioneered. The company had announced in April that low-priced ad-supported plans will be introduced soon, and the company announced last week that it has roped in Microsoft as its advertising partner.
Microsoft will be in charge of creating and operating the platform for marketers interested in serving advertising to Netflix viewers. The commercials-supported membership will however be in addition to the three existing choices of basic, standard and premium plans, the cheapest of which is $10 a month in the United States.
It is important to mention that the company has been facing severe hardships regarding subscriptions in India as well. The video streaming platform has been struggling to please the Indian market and is worried about slow growth of number of subscriptions from the country. The company has hardly seen profits since its inception in India. On January 20, Netflix co-founder and CEO Reed Hastings had expressed his ‘frustration’ during an investor call over the slow growth of the video streaming company in the Indian market.
Considering the super slow growth of the video-based platform in India, Netflix earlier had decided to revamp the entire content of the Indian web series and movies which were to be released shortly. Netflix India had decided to study the taste of the Indian audiences and expand the market accordingly in the future. It had also decided to do away with its serious, dark content and try new ideas with a more commercial approach for the Indian viewers.
The company also partnered with the Ministry of Information and Broadcasting and launched the first set of short video series named ‘Azadi Ki Amrit Kahaniya’ bringing out inspiring stories of seven Indian women as a part of the celebration of Azadi Ka Amrit Mahotsav.
“In our experience in Brazil, it was brutal for the first couple of years. We thought we’d never break even. I know we’ve got this great business. The great news is that in every single other major market, we’ve got the flywheel spinning. The thing that frustrates us is why haven’t we been more successful in India”, he had said.
After the second quarter report witnessed the loss of around a million subscribers from all over the world, the company has proposed plans to launch subscription options which would include a showcase of commercials amid the content. Netflix will work with Microsoft to launch a cheaper subscription plan that would include advertisements.