Netflix lost a million subscribers in the three months to June as it struggled to retain customers in the face of stiff competition and rising living costs.
The American streaming giant, responsible for popular programs such as Stranger Things, Bridgerton and Squid Game, reported that the number of subscribers fell by a million between April and June as it struggled to stop the rot of viewing figures.
It is the second consecutive quarter of Netflix subscriber losses, after a drop of 200,000 earlier this year. The decline earlier this year was its first drop in a decade. Still, Netflix called the latest losses “better than expected.”
The company cited the success of its last season of Stranger Things to increase retention.
He also revealed that he planned to crack down on 100 million households that are estimated to share a Netflix password without paying for the service.
The technology company faces growing competition from Disney, Apple, Paramount, Hulu and Amazon as its dominant position is threatened.
Reducing the cost of living is also hurting as households try to save money.
In the UK, the share of new Netflix subscribers fell to 4.5%, down from 15% in the same period last year. A Kantar report found that a third of Americans planned to close a video streaming account to save money to deal with inflation.
The results followed what analysts described as a day of “spectacularly bad” results earlier this year, as growth slowed on Netflix and warned that its number of subscribers would begin to decline.
Netflix has already lost about two-thirds of its market capitalization so far this year, valuing it at about $ 90 billion (£ 75 billion), or $ 201 per share, on Tuesday night .
The drop in subscriber numbers on Tuesday was less than the 2 million Netflix had predicted. He also predicted that the number of subscribers could start to increase by the end of the year. Shares rose 6% in trading hours.
Revenue grew 8.8% year-on-year to just under $ 8 billion in the three months ending June.
Netflix has injected billions of dollars into original shows, many produced in the UK, while looking for hits that can reclaim viewers from its rivals. But despite spending hundreds of millions of dollars on new movies, including $ 200 million in The Gray Man, starring Ryan Gosling, many have failed to capture criticism.
Luxurious spending on content has also left him in a pile of $ 14 billion in debt.
In an effort to bolster revenue and account numbers, Netflix is considering charging an additional fee to customers who share their passwords. He has started testing the position for some Latin American clients. Users will be asked to “add a home” to their account, at a cost of $ 1.70 to use their account in another location.
Netflix is also working on an advertising-compatible product, which would be offered at a reduced price. The streaming company signed an agreement with Microsoft to build its advertising technology. Analysts have estimated that a level with advertising support could contribute between $ 500 and $ 1.5 billion per quarter.