How Netflix Lost 200K Subscribers in 4 Months
by Emily Nagle
Netflix’s Q1 financial results are in, and they aren’t looking too hot. For the first time ever, the streaming king has lost a substantial amount of subscribers in only a few months. 200,000 subscriptions were terminated; that number is only expected to skyrocket in the second quarter.
Why have so many people unsubscribed? The major catalyst is the price increase, as the company has raised their monthly rate to $15.50, whereas before it was $14. While it’s less than two dollars, everything adds up in the end.
This change prompted many users to cancel their subscriptions and share with friends or loved ones to save money. Netflix caught on, announcing that at least 130 million users share passwords, with nearly a quarter of them located in the U.S. and Canada.
In their quarterly shareholder letter, Netflix wrote, “Our relatively high household penetration — when including the large number of households sharing accounts — combined with competition, is creating revenue growth headwinds. Account sharing as a percentage of our paying membership hasn’t changed much over the years, but, coupled with the first factor, means it’s harder to grow membership in many markets — an issue that was obscured by our COVID growth.”
People have shared Netflix accounts for ages, and initially the company saw no issues with it because it allowed more people to view their content. But with increasing competition as seemingly every media company starts their own streaming service, Netflix has hinted that they will begin cracking down on password sharing. The company has tested out possible solutions in Chile, Costa Rica, and Peru, but they were met with overwhelmingly negative feedback from customers.