The cost of living has increased for many consumers in recent months, and many people have had to find ways to cut back on their household bills and expenses.
It seems that one of the ways consumers are cutting back is by canceling their Netflix subscription. The company saw a large rise in its profits during the COVID-19 lockdowns. However, its recent reports show it has lost 200,000 subscribers in the last quarter.
According to Netflix, it had hoped to gain 2.5 million subscribers this year – but its earnings report shows it lost subscribers instead, and it’s predicted to lose two million more by June.
Although the company’s revenue was reported as 10% higher than the previous quarter, at $7.9 billion, it’s likely that this is due to a recent increase in subscription prices. Additionally, the last quarter’s profits were slightly lower than the same period in 2021.
The company said in a filing, “The big COVID boost to streaming obscured the picture until recently. However, our relatively high household penetration – when including the large number of households sharing accounts – combined with competition, is creating revenue growth headwinds.”
Netflix has also blamed its disappointing results on “sluggish economic growth, increasing inflation, [and] geopolitical events such as Russia’s invasion of Ukraine”.
The company has faced stronger competition recently. Netflix is incredibly popular, but it now faces robust competitors in the streaming market, like Disney+, Prime Video, and Hulu.
A recent hike in monthly subscription prices could also be behind the drop in the number of users, as many consumers are looking for ways to cut their costs.
In addition to this, rumors that the company plans to put an end to password sharing have affected the popularity of the service. Netflix says that it could start charging users more if they share their passwords, and it is already running a pilot of this in Costa Rica, Peru, and Chile.
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