Million viewers leave Netflix as living costs hit subscriptions
NETFLIX lost a million subscribers in the three months to June, as it battled to retain customers in the face of stiff competition and rising living costs.
The US streaming giant, which is responsible for hit shows such as Stranger Things, Bridgerton and Squid Game, reported subscriber numbers fell 1m between April and June as it struggled to stop the rot in viewing figures. It marks Netflix’s second consecutive quarter of subscriber losses, after a drop of 200,000 earlier this year. The decline at the start of the year was its first fall in a decade.
However, Netflix called the latest losses “better-than-expected” and cited the success of its latest season of Stranger Things for boosting retention. It also revealed it planned to crack down on 100m households it estimates share a Netflix password without paying for the service. The company is facing growing competition from Disney, Apple, Paramount, Hulu and Amazon as its once dominant position comes under threat.
A cost of living squeeze is also hurting as households try to save money.
In the UK, Netflix’s share of new subscribers fell to just 4.5pc, down from 15pc in the same period last year.
A Kantar report found that a third of Americans were planning to close a video streaming account in order to save money to cope with inflation. Earlier this year growth slowed at Netflix and it warned its subscriber numbers would begin to wane.
Netflix has already lost around two thirds of its market cap so far this year, valuing it at around $90bn (£75bn), or $201 per share.
Last night’s fall in subscriber numbers was less than the 2m Netflix had forecast. It also predicted subscriber numbers could start to increase later this year. Shares in Netflix rose 6pc in after hours trading.
Revenues grew 8.8pc year on year to just under $8bn in the three months ending in June.
Netflix has pumped billions of dollars into original shows, many produced in the UK, as it hunts for hits that can reclaim viewers from rivals. But despite spending hundreds of millions of dollars on new movies many have failed to make a splash with critics.