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Two big changes by Netflix as subscriber numbers drop

The streaming service lost 200,000 subscribers in the first quarter of this year, although it still has 220 million users worldwide.

Netflix has announced that it has lost subscribers for the first time in more than a decade, sending the streaming service’s share price plummeting. Shares in the company initially fell nearly 20 percent after the announcement was made.

In the first three months of this year, Netflix lost 200,000 subscribers. The service saw an influx of new customers during the coronavirus pandemic, as countries around the world went into lockdown.

The first quarter of 2022 marks the first time Netflix has reported an overall loss of subscribers since October 2011. But why is Netflix losing subscribers – and what changes is the company planning to stem the flow?

How many subscribers does Netflix have?

Despite losing subscribers during the first three months of this year, Netflix still has more than 220 million subscribers worldwide. Hit shows like Bridgerton have seen the service’s customer base grow rapidly in recent years.

Why is Netflix losing subscribers?

Netflix lost subscribers in the first quarter of 2022 after pulling out of Russia following its invasion of Ukraine, while raising its prices in other markets including the US and UK.

The company has warned that it expects to lose more customers in the coming months. Another two million subscribers will likely leave between April and June, Netflix said.

What changes did Netflix make?

Netflix is ​​reportedly planning to make some major changes after reporting a decline in its subscriber base. Specifically, the company is planning actions to stop people from sharing Netflix passwords, estimating that more than 100 million households are currently doing so.

Previous attempts to crack down on password sharing have yielded modest results for Netflix. However, the company has identified it as a major problem and accounts found to be shared among households could cost more.

Also, Netflix chief executive Reed Hastings told shareholders that the service wants to offer low-cost subscriptions that are supported by ads, in addition to the current ad-free version. A new, less expensive subscription model will roll out “over the next year or two”, he said.

Why did Netflix stock drop? Netflix says it expects to lose another two million subscribers over the next three months, sending its shares into freefall.

Shares in streaming service Netflix have fallen sharply in trading today (April 20th), after the company announced a drop in subscribers during the first quarter of the year. The company expects to lose millions more users over the coming months.

CNBC reports that Netflix stocks slumped by 37 per cent after announcing its first-quarter results. The service saw rapid growth in its subscriber base during the coronavirus pandemic, with people largely confined to their homes during lockdown.

However, the end of Covid restrictions and increased competition have put Netflix under increasing pressure. Some households are also cutting back on their streaming subscriptions as the rising cost of living begins to bite.

Why did Netflix stock drop?

Netflix stocks slumped on Wednesday after the company announced that it had lost 200,000 subscribers during the first three months of 2022. It expects to lose another two million between April and June.

Consumers are spending less time watching streaming services now that lockdown restrictions have ended, while the burgeoning cost of living crisis is also causing households to reconsider their financial priorities.

In addition, Netflix pulled out of Russia after the invasion of Ukraine. It has also raised prices in key markets including the United States and the UK.

The company’s chief executive, Reed Hastings, told shareholders that Netflix would clamp down on password sharing. It estimates that more than 100 million households are sharing Netflix passwords, depriving the firm of revenue. Netflix is also preparing to offer a cheaper, ad-supported subscription rate alongside its ad-free model. Reed Hastings said the new subscription would be rolled out “over the next couple of years”.