The company lost 970,000 subscribers in the second quarter after losing 200,000 in the first. In the second quarter of the year, the company's paid memberships fell from 222.64 million to 220.67 million.
It is the first time in the history of the company that it has reported consecutive quarters of subscriber losses. The second-quarter loss of 2 million subscribers was worse than expected.
According to a Seeking Alpha transcript, Reed Hastings said in a call with analysts yesterday that "losing 1 million and calling it a success is tough," but he added that the company is "set up very well for the next year" Larger subscriber losses may have been prevented by the newest season of the show.
The company expects to add 1 million paid subscribers in the third quarter of the year. The company's paid subscribers reached a peak of 221.84 million in the fourth quarter of 2021.
On the same day that the earnings report came, the company introduced an " extra home" fee in Argentina. In other countries, there was a fee for extra members. In a letter to shareholders, the company said it wants to complete a broader roll out of sharing fees next year.
We're in the early stages of working to monetize the 100m+ households that are currently enjoying, but not directly paying for, Netflix. We know this will be a change for our members. As such, we have launched two different approaches in Latin America to learn more. Our goal is to find an easy-to-use paid sharing offering that we believe works for our members and our business that we can roll out in 2023. We're encouraged by our early learnings and ability to convert consumers to paid sharing in Latin America.
The plan for an ad-supported tier was updated. "We recently announced Microsoft as our technology and sales partner, and we're targeting to launch this tier around the early part of the next decade," the company said. The ad-supported tier will be rolled out by the end of the year.
AdvertisementThe ad-free option will be cheaper than the ad-supported option. The plans for account-sharing fees and ads are a key part of the company's strategy.
In the near term, a key priority to re-accelerate revenue growth is to evolve and improve our monetization. In the early days of streaming, we kept our pricing very simple with just one plan level. In 2014, we introduced three price tiers to better segment demand. Going forward, we will focus on better monetizing usage through both continued optimization of our pricing and tiering structures as well as the addition of a new, lower-priced ad-supported tier.
According to the company, it hopes to create an advertisement model that is more relevant for consumers and that the new system will be more effective for advertising partners.
The year-over-year revenue growth was over 24 percent in the first quarter of 2021, but only 8.6 percent in the second. In the last three quarters, total revenue ranged from $7.21 billion to $7.97 billion. In Q3 2022, the company predicts revenue of $7.84 billion, which would be a year-over-year growth of savesay savesay savesay predicts revenue of $7.84 billion in Q3 2022, which would be a year-over-year growth savesay predicts revenue of $7.84 billion in
"While it will take some time to grow our member base for the ad tier and the associated ad revenues, over the long run, we think advertising can enable substantial incremental membership and profit growth," the company said.
In the second quarter of the year, net income was over a billion dollars and is expected to be over a billion dollars in the third quarter. The company told shareholders that it is in a strong position given its $30 billion in revenue, $6 billion in operating profit last year, and a strong balance sheet.
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