Netflix presented its quarterly performance report late Tuesday afternoon (7/19) in a report aimed at the North American financial market, in which it confirms the downward trend in the number of its subscriptions.
According to the survey, the company lost nearly 1 million subscribers during the second quarter. A total of 970,000 accounts were closed between April and June 2022, a significant increase from the 200,000 canceled in the first quarter.
Even so, it represents a better result than his own expectations, which hovered around 2 million, due to the boycott of Russia and the crash of the internet in Ukraine, the two largest countries in Europe. The company was even optimistic when it released growth recovery projections for the third quarter, when it believes it will add another million subscribers. But even if that number is confirmed, it will continue to have fewer subscribers than in 2021.
Netflix currently has a total of 220.67 million subscribers, with revenue of $ 7.97 billion generated from these subscriptions in the second quarter. Since there has been an increase in the amount charged and a skyrocketing dollar in the international market, the decline in subscribers has not affected financial growth, which has gained about 8% more than last year, according to the letter of Netflix to shareholders. Net income, excluding expenses, reached $ 1.44 billion.
The region that suffered the largest decline was North America (the United States and Canada), with a loss of 1.3 million subscribers, despite the launch of major English-language series in the quarter, such as the fourth season of “Stranger. Things “. The region that includes Europe, the Middle East and Africa also declined, losing 770,000 accounts.
On the other hand, Latin America recorded a modest addition of 1,000 new subscribers, while the Asia-Pacific region brought in 1.08 million new subscribers during the quarter. It is worth mentioning that Netflix has made a special price promotion in India, establishing its cheapest subscription in the world in the country.
The numbers indicate stagnation. And they served as a warning to the company, which was known for large investments in content without much discretion.
Currently in review mode of its business model, the streamer has made several rounds of layoffs, with the most recent leading to the loss of 300 employees. It also reevaluated its strategy of focusing on fewer projects, favoring more flashy productions, and accelerated the adoption of new subscription models. There will be a password sharing fee and a cheaper subscription option, encouraged by the implementation of advertising, in partnership with Microsoft.
In its letter to shareholders, Netflix said it plans to release its ad version “in early 2023”. The offering will likely launch first in markets where “ad spend is significant”.
“While it takes time to grow our subscriber base for the ad version, in the long run we think advertising can enable substantial adhesion (through lower prices) and higher profits (through ad revenue),” he says. the company document.
Source: Terra
Camila Luna is a writer at Gossipify, where she covers the latest movies and television series. With a passion for all things entertainment, Camila brings her unique perspective to her writing and offers readers an inside look at the industry. Camila is a graduate from the University of California, Los Angeles (UCLA) with a degree in English and is also a avid movie watcher.
