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Netflix’s Q2 Subscriber Losses Weren’t As Bad As Expected

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Netflix closed the second quarter of 2022 with 73.28 million paid subscribers in the United States and Canada, indicating losses were not as bad as the company and the media has previously suggested. There has been a lot of talk surrounding Netflix recently, and how it is feeling the pressure of other streaming services as well as the market in general. However, the latest quarterly subscriber results paint a slightly better picture for the streaming giant.

In terms of the US and Canada, Netflix closed the same quarter of last year with 73.95 million subscribers and finished up the first quarter of this year with 74.58 million. Although this has resulted in a quarter-over-quarter decline of roughly 1.3 million subscribers, the year-over-year drop is far less significant, coming in at roughly 670,000.

If looking at the bigger, global picture, then Netflix finished up the second quarter of 2022 with 220.67 million subscribers. Compared to the 221.64 million of Q1 2022, this resulted in a drop close to one million. Compared to the 209.18 million reported during the second quarter of 2021, Netflix saw a year-over-year increase of almost 11.5 million global subscribers.

Looking further ahead, Netflix now predicts to finish up the third quarter of this year with around 221.67 paid subscribers, an increase of roughly one million on the latest reported number. The company also added that it is “confident and optimistic about the future” in general, and that it has been through hard times before. The letter to shareholders also took a moment to touch on its plan to charge for ‘paid sharing’ in an attempt to bring in some additional revenue from those homes that are watching Netflix but not directly paying for a subscription.

The company is already testing out a couple of ways to do this and plans to more formally roll out the method it deems most suitable sometime in 2023. One of the most recent tests was announced earlier this week and is currently active in select countries. Essentially, Netflix is charging an additional $3 each month for any subscriptions that are being used in more than one home. Similar to the multiple homes monetization that’s likely rolling out everywhere next year, Netflix also reconfirmed its plans to launch an ad-supported plan in early 2023. This plan will be available alongside the existing ad-free plans, but will be priced cheaper to account for the ads. Netflix had already confirmed that it is leaning on Microsoft as a “technology and sales partner” to help implement the new ad-supported system.

John Finn

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