Streaming giant Netflix saw its stock tumbling by 20 percent after it reported a loss of 2 lakh paid subscribers in the first quarter of 2022 — its first subscriber loss in over a decade.
Moreover, Netflix forecasts a global paid subscriber loss of 20 lakh for the second quarter (Q2) of 2022.
The decline has brought Netflix’s subscriber base to 221.6 million, down from 221.8 million in the previous quarter.
“The suspension of our service in Russia and winding-down of all Russian paid memberships resulted in a 7 lakh impact on paid net adds; excluding this impact, paid net additions totaled 5 lakh,” the company said in a statement late on Tuesday.
The company told its shareholders that it expected to add 2.5 million net subscribers during the first quarter, compared with 4 million in the same quarter a year ago.
The main challenge for membership growth, said Netflix, is continued soft acquisition across all regions.
Netflix informed that in addition to its 222 million paying households, it estimates that the streaming service is being shared with over 100 million additional households.
“Account sharing as a percentage of our paying membership hasn’t changed much over the years, but, coupled with the first factor, means it’s harder to grow membership in many markets – an issue that was obscured by our Covid growth,” the company noted.
Netflix said it is making good progress in APAC “where we are seeing nice growth in a variety of markets including Japan, India, Philippines, Thailand, and Taiwan”.
Its revenue in the first quarter reached $7.78 billion. The net cash generated by operating activities in Q1 was $923 million.