Streaming service giant Netflix has announced a surprising contraction in its subscriber base in the first quarter of 2022, announcing that it lost net 200,000 subscribers in the last three months. This comes after it had added about net 8.3 million users in the last quarter of 2022.
These numbers, according to the company, are partially explained by its decision to pull out of Russia in protest against its invasion of Ukraine. However, Netflix’s projection for the next quarter forecasts that it will lose another 2 million subscribers.
However, while North America and Europe seem to be becoming saturated markets for Netflix, the Asia-Pacific region (APAC), including India, saw a net subscriber growth of 1.09 million users in the last quarter.
COO Greg Peters said that Netflix sees the subcontinent as an opportunity for long-term growth, even as he mentioned that new users over the past year have not proven to be any more engaged than the earlier adopters of the service.
“India is a bet on long term revenue maximisation,” said Peters.
Netlix co-CEO Ted Sarandos added to the platform’s optimism on India, saying that its new slashed prices in India have seen subscriber and revenue growth potential. He added that Indian usage is trending in the right direction for the company.
“The product fit incorporates subscription prices as well as the willingness and ability to pay. So we have seen a nice uptick in engagement in India. We are definitely taking it in the right direction,” said Sarandos.
The biggest issue that Netflix mentioned on its earnings call was the fact that while the company has around 220 million subscribers, it estimates that another 100 million households have access to these accounts and are using Netflix simultaneously.
According to ceo-CEO Reed Hastings, the streaming platform’s challenge is to monetise these users in some way, whether through ads or something else.
“There are over 100 million households that already are choosing to view Netflix. They love the service. We just got to get paid to some degree for them,” he said.
Wall Street does not seem satisfied with these explanations as Netflix’s stock price dropped by more than 25 percent after the earnings release.
