For the First Time in 10 Years, Netflix Is Losing Subscribers

Are you looking to cancel that Netflix subscription, too?

2022 is off to a rough start for Netflix as it is seeing its first dip in its subscriber count, which happens to be its largest since 2004.

The streaming giant had a net loss of 200,000 subscribers overall during the first quarter. It is also projected that the service will be losing two million subscribers in the second quarter. This has led to its stock plummeting about 37 percent in trading, based on this week's reports.

In its letter to shareholders, Netflix had attributed its hefty loss to increased competition from traditional and broadcast television, as well as from emerging services such as Disney+ and HBO Max. Macroeconomic factors were also cited, covering increased inflation and the ongoing conflict in Ukraine. The invasion alone has reversed growth in Europe, losing roughly 700,000 Russian accounts in the process.

The platform also lost subscribers in practically every region apart from the Asia-Pacific market. It lost 640,000 subscribers in the U.S./Canada region and reported a 300,000 subscriber loss in Europe, the Middle East, and Africa. Netflix also had an estimated 350,000 loss in Latin America.

One drastic change the company is considering is rethinking its no-advertising strategy. In a taped interview with investors, co-chief executive Reed Hastings admitted that they have observed that consumers would "like to have a lower price" and are "advertising-tolerant" when it comes to their preferences.

Netflix is also looking into fully venturing into the gaming side of the business. Earlier this week, the platform announced that a mobile game and new animated show that revolves around the card game "Exploding Kittens" is about to be released.

Industry analysts also underscore the "lack of must-see content" in Netflix's latest offerings. In terms of the product, Netflix will soon be introducing a new "double thumbs up" feature. This should allow the service to improve personalized recommendations for consumers.

The company also plans to crack down on password sharing. The streaming giant sees roughly 100 million unauthorized users because of this. Testing solutions for the issue will be done in Latin America.

In addition, the industry leader understands future growth will be dependent on activity outside the United States. Shows like Squid Game, All of Us Are Dead, and Money Heist have performed tremendously well. International production capacity will be a point of emphasis for the company as well.

Nevertheless, the streaming giant still leads its contemporaries in terms of its subscriber base, with 221.64 million. While all reports indicate a slower growth rate compared to the past years, the once-celebrated innovator and industry disruptor is hoping to bounce back.