US streaming service Netflix has revealed that it lost nearly a million subscribers in the last three months of its fiscal year as the global crisis in the cost of living affects family entertainment budgets.
The company reported having 970,000 fewer customers in the period, having warned in April that the figure could expand to two million as it faces a number of business challenges.
However, he said he predicted a return to subscriber growth in the current quarter.
That effort would be helped starting next year, Netflix said, by launching a new, cheaper ad-supported service and through new multifamily contracts.
The earnings report covering the second quarter through the end of June was eagerly awaited by investors after a bloodbath for its shares when it reported a shocking fall – the first in a decade – to the its subscriber base between January and March.
The number of customers then fell by 200,000 when the company had planned an increase of 2.5 million new customers.
The figures would have been in positive territory had it not been for Netflix’s decision to suspend services in Russia in retaliation for the Ukrainian war.
However, shares fell 40% when Netflix forecast that it would continue to bleed subscribers amid stiff competition and pressure on household disposable income in its markets due to rising inflation.
Netflix has responded to declining revenue by raising prices in major markets, including the U.S. and UK, and cracking down on people who share passwords with other households.
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As part of those efforts, streamer Squid Game and Stranger Things has moved to create a multifamily subscription offering, which will begin in South and Central America.
He is also working with Microsoft to create the cheapest plan that would contain ads to reduce costs for consumers.
March-June revenues were just below $ 8 billion, below analysts ’lowest expectations.
Shares, which this year have lost two-thirds of their value amid a decline in so-called growth stocks generally in the high inflation environment, rose more than 5% during Tuesday’s official trading.
They increased by up to 8% in offers outside working hours.
The company told shareholders in a letter: “Our challenge and opportunity is to accelerate the growth of our revenue and members by continuing to improve our product, content and marketing as we have done for the past 25 years, and to better monetize our great audience. “
This is expected to include building on the popularity of Stranger Things, which Netflix has said it wants to turn into a franchise.