Boycotts, account sharing, and streaming competition has led Netflix to lose subscribers for the first time in over a decade.
The streaming service made the announcement to investors on April 19. It shed 200,000 members in the first quarter of 2022, warning that it will get much worse by July 1.
While the company did not specifically mention it, the boycott over the company’s sexualization of children is a central issue for many past and potential subscribers. The boycott has caused tens of thousands to leave Netflix after it aired “Cuties,” which observers say bordered on abuse of child actors.
Cancellations were up 800% during the controversy and continue as pro-family and Christian groups continue pressure on the company to remove the program.
In a dramatic reversal, Netflix expects to lose 2 million global subscribers in the current quarter after previously forecasting it would add 2.5 million paying customers. That’s a 4.5 million subscriber swing. It’s been over a decade since it lost subscribers.
“Our revenue growth has slowed considerably,” Netflix said in a letter to shareholders. “COVID clouded the picture by significantly increasing our growth in 2020, leading us to believe that most of our slowing growth in 2021 was due to the COVID pull forward.”
Netflix blamed its decline in membership on a combination of factors including “macroeconomic weakness” and changes to its prices. Earlier this year, the streaming giant announced that it would be raising its U.S. monthly subscription prices by $1 to $2 per month depending on the plan.
A total of 600,000 people stopped its service in the United States and Canada due to the price change, Netflix said.
It also pointed to account sharing across non-paying households, estimating that 100 million are sharing household accounts, including over 30 million in the United States and Canada.
Back in March, Netflix said it plans to implement a new feature that would prevent different households from sharing their account passwords by charging them additional fees, something it has been working on for the past year.
That feature, Netflix says, will allow members who share their Netflix passwords with someone outside of their household to do so “easily and securely, while also paying a bit more.”
In its letter to investors, Netflix said it ended the quarter with roughly 222 million subscribers.
Going forward, the company said “On the content side, we’re doubling down on story development and creative excellence,” Netflix said in its earnings letter. It did not mention the controversy over “Cuties” or other questionable programming that is driving away viewers.
One thing the company is considering that may raise revenue but also drive away more subscribers is placing commercials into programs.
Following the announcement of subscription losses, Netflix’s stock price plunged by as much as 25 percent in after-hours trading.
–Metro Voice and wire services.