Password sharing is something that may have to be cracked down on. In a letter to shareholders, the OG streaming giant said that it is losing subscribers for the first time in a decade. 200,000 subscribers have left the platform since the last quarter, which went from 221.84 million paying members to 221.64 million.
The company expects its customer base to shrink next quarter to an estimated 219.64 million people.
After the release of the letter, the share values of the company dropped by more than 25%.
The company largely blamed the membership loss on competition and its existing success (i.e. there’s no new customers left). “Our relatively high household penetration - when including the large number of households sharing accounts - combined with competition, is creating revenue growth headwinds,” Netflix wrote in the shareholder letter. But the company also estimated that, on top of its more than 222 million paying subscribers, an additional 100 million households are leaching their Netflix content via password sharing—contributing to the losses. In response, the company is threatening to crack down on password sharing, stating that they’re working on the “monetization of multi-household sharing.”Maybe it's time to give up your friend-of-a-friend's login info if you want to access that sweet, sweetNetflix original content long into the future. Gizmodo doesn't endorse or condemn this idea.
As with every good corporate announcement, Netflix blamed some of the losses on factors beyond their control. The letter states that the company is partially responsible for its subscriber downturn due to the following: sluggish economic growth, increasing inflation, geopolitical events such as Russia's invasion of Ukraine, and continued disruption from Covidien. The company said it lost about one million subscribers in Russia.
The company reported a revenue growth of almost 10%. Maybe you can keep your ex-uncle's password after all.
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