During the second quarter of 2022, Netflix recorded a 970,000 subscriber drop in its most recent earnings report to shareholders. The tale, however, doesn’t rest there since, despite the fact that the loss of roughly 1 million Netflix customers may seem alarming, it was significantly less than the company had anticipated, which was a loss of 2 million subscribers over the course of the quarter.
Additionally, Netflix reported an 8.6% gain in income, driven by higher average paid membership rates and average revenue per membership (ARM). Due to this, its stock price did not drastically decline, as it did in the first quarter of 2022, and in fact, it increased by roughly 7% in after-market trade.
Despite the fact that Netflix reported a subscriber loss for the second consecutive quarter, the business anticipates a 1 million increase in subscribers and a 5% increase in revenue in Q3 2022. In addition, Netflix said that if not for the impact of foreign exchange, its revenue growth this quarter would have been greater at 13%.
Despite the decline in members, Netflix has continued with its long-term goals by collaborating with Microsoft to launch a less expensive ad-supported subscription option by early 2023.
In addition to paid account sharing, Netflix has stated that it intends to monetise over 100 million homes that do not already pay for Netflix directly. In order to do further research, Netflix has made its “Add a home” tool available to Latin American nations.
In light of the increased rivalry among streaming services, which are also boosting their member bases, it will be interesting to watch if Netflix’s expectations are realized in a timely manner.