Netflix reports loss of 200,000 subscribers in quarterly results.

For the first time in the last decade, Netflix lost — 200,000 — indicating the maturity of its service and the increased competition in the space. The news, plus the company’s announcement that its second quarter would also see a loss of subscribers sent the stock down 20 percent in after-hours trading on Tuesday.

Total subscribers now stand at 221.64 million compared with 221.84 million last quarter. The company still has the largest subscriber base of all the streaming services, but the news puts it at well below the 2.5 million subscriber additions that Wall Street analysts were expecting.

The company made $1.6 billion in profit on $7.8 billion in first-quarter sales, a 10 percent increase in revenue compared to the same period last year.

In a letter to shareholders, Netflix attributed its subscriber loss to four factors: a slowdown in the adoption of broadband and smart TVs; password sharing among households, which the company believes accounts for over 100 million nonpaying viewers; increased competition from both traditional cable and broadcast TV and other emerging streaming services; and macroeconomic factors like increased inflation and Russia’s invasion of Ukraine, which prompted Netflix to shutter its service in Russia, resulting in a loss of 700,000 subscribers.

The company lost 600,000 subscribers in the US and Canada, which it is primarily attributed to its most recent price hike. It also lost subscriptions in Europe because of a variety of factors, including Russia’s invasion of Ukraine. Asia was the one region that showed growth, with Japan, India and the Philippines, among other countries, adding subscribers.

Netflix forecast a loss of two million subscribers for its second quarter of 2022 versus the 1.5 million subscriptions it added during the same period last year. Revenue should still grow by 10 percent for the upcoming period.

The company said it intended to jump-start its revenue growth by improving all of Netflix, specifically “the quality of our programming and recommendations, which is what our members value most.” The company said it would “double down on story development and creative excellence” and pointed to recent successes, including two shows created by Shonda Rhimes — the second season of “Bridgerton,” which generated 627 million viewed hours, and “Inventing Anna,” with 512 million viewed hours; As well as the family adventure film, “The Adam Project,” starring Ryan Reynolds, which was viewed for 233 million hours.

On the product side, the company introduced the “double thumbs up” button, which allows viewers to “express what they truly love,” and should help the company improve its personalized recommendations for the consumer.

Netflix is ​​also trying to clamp down on password sharing among households — a worldwide phenomenon that the company accounts for 100 million unauthorized users. To combat this, Netflix started testing solutions in three markets in Latin America. One possible option would allow current members to pay for additional households.

The company also admits that much of its future growth will come from outside the US Today, three out of its six most popular TV shows are all non-English language: The South Korean shows “Squid Game” and “All of Us Are Dead, and season four of the Spanish show “Money Heist.” To support this Netflix has been building out its international production capabilities and is now producing film and television in more than 50 countries.

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