Netflix Bleeds Another 1M Customers, Clarifies Disappointing Detail For Its Ad-Supported Tier
Netflix admits a disappointing fact about its upcoming cheaper tier, following another quarter of losing subscribers. The company projected it would lose 2 million members in Q2, after reporting a loss of 200,000 subscribers in Q1.
The popular streaming company announced this week that it is testing a new password sharing fee in five Latin America countries. Netflix is hoping that it can combat some of the monetary losses it has incurred due to password sharing, which it has said is a large part of the reason it lost so many subscribers back in Q1. Now the company is reporting it has lost another 1 million members in Q2, which while only half of what it projected it would lose a few months ago, is still a hefty loss.
The company stated that the better outcome for Q2 was attributed to a slightly "better-than-expected" subscriber growth, especially in places such as Asia-Pacific. While the company still reported losing 1 million customers, it was able to net a $1.44 billion net profit.
Netflix has actually started changing its pessimistic tone a bit, as it now believes it will add a net 1 million subscribers in the next quarter. Thoughts are that shows like "Stranger Things" will help its numbers in the coming months. The latest season of the beloved "Stranger Things" series is now Netflix's most watched season of English TV to date with over 1.3 billion hours of viewing.
One of the talked about ways of trying to win back some of its customers has been a less expensive ad-supported tier. The hope is that people who have left the streaming platform due to finances, or have been using someone else's account to watch, will opt-in to the cheaper plan. The company hopes to launch the new tier in early 2023.
However, if you are looking forward to the new ad-supported plan, you may miss out on some of the content currently offered by Netflix. It was not made clear what that content might be, however, during the company's Q2 2022 earnings interview video. The Wall Street Journal reported last week that the company was in talks with various studios about their content so it could be included it on the ad-supported plan, but it sounds like not all shows and movies will make the cut.
"Today, the vast majority of what people watch on Netflix, we can include in the ad-supported tier," stated co-CEO Ted Sarandos. "There are some things that don't - that we're in conversation about with the studios on - but if we launched the product today, the members in the ad tier would have a great experience. We will clear some additional content, but certainly not all of it, but we don't think it's a material holdback to the business."
The takeaway is that all of Netflix's original content should be available on the ad-supported tier, including "Stranger Things," but not the entire streaming catalog. Bummer.
Top Image Credit: Netflix