Netflix subscriber base is continuing to decline. On Tuesday, the company released its second-quarter earnings statement (Q2 2022), as well as an earnings interview in which it highlighted subscriber losses for two consecutive quarters for the first time in its history. It lost nearly 970,000 paid subscribers in the June quarter, which was still less than the two million expected. The streaming giant lost nearly 200,000 paid subscribers in the March quarter (Q1 2022).
The company currently reports 220.67 million paid members worldwide. It also expects to add a million subscribers in the next quarter as a result of the release of Stranger Things Season 4 Volume 1 and 2. The company also added new episodes of popular shows such as Better Call Saul and Peaky Blinders, which may boost the subscriber base in the September quarter.
The company's executives are still upbeat about this quarter (Q3 2022). Interestingly, despite a drop in subscriber base, the company's revenue increased in Q2 2022 (9 percent year over year). Revenue is expected to fall in the coming quarter.
"The appreciation of the USD vs. most other currencies since our April earnings report was the primary reason for the variance to our revenue guidance forecast," Netflix says in its quarterly report.
Netflix stated in its earnings video that it is still in talks with major studios to bring content into this special tier with ads. Ted Sarandos, co-CEO of Netflix, stated, "If we launched the product [ad-supported subscription] today, the ad tier members would have a fantastic experience. We will clear some additional content, but not all of it, because we do not believe it is a material impediment to the business."
We expected this development in our previous report because Netflix was still in talks with Warner Bros, Universal, and Sony Pictures Television to launch the ad-supported subscription model. The ad-supported subscription is being developed in collaboration with Microsoft.
Netflix plans to launch an ad-supported tier in early 2023. This subscription may include Netflix original titles, but this is only a rumour.
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