Netflix, America’s streaming giant, says it lost about 970,000 subscribers in the second quarter (Q2) of 2022.
The company’s leadership disclosed this on Tuesday in an interview on its website while speaking on its financial performance.
Although the 970,000 loss may seem damning for the company, it is a slight improvement from its expected 2 million customer loss in the quarter under review, after it lost 200,000 subscribers in Q1 2022.
In a letter to its shareholders, seen by TheCable, Netflix also recorded a 9 percent revenue increase in Q2 driven by an increase in paid membership.
In the letter, the company said Q2 turned out “better-than-expected” on membership growth.
It, however, said foreign exchange was “worse-than-expected” (stronger US dollar), resulting in 9 percent revenue growth.
“Our challenge and opportunity is to accelerate our revenue and membership growth by continuing to improve our product, content, and marketing as we’ve done for the last 25 years, and to better monetize our big audience,” Netflix said.
“We’re in a position of strength given our $30 billion-plus in revenue, $6 billion in operating profit last
year, growing free cash flow, and a strong balance sheet.
“Revenue in Q2 grew 9 percent year over year (or 13 percent excluding a -$339 million foreign currency impact), driven by a 6 percent and 2 percent increase in average paid memberships and ARM, respectively.
“Excluding the impact of foreign exchange (F/X), ARM rose 7 percent year over year. The appreciation of the US dollar (USD) vs. most other currencies since our April earnings report was the primary reason for the variance to our revenue guidance forecast.”
Apart from paid membership, Netflix said its content offering contributed to the results as it is designed to satisfy a broad range of member tastes by providing a variety and quality of titles.
“Our Q2 slate is emblematic of this approach, headlined by season four of ‘Stranger Things’, which returned to tremendous fan reception and was a smash hit by all measures — including an outstanding drama Emmy nomination (along with ‘Ozark’ season 4 and ‘Squid Game’),” it said.
“In its first four weeks, “Stranger Things” season four generated 1.3 billion hours viewed, making it our biggest
season of English TV ever. Season four also re-ignited interest in past episodes with season one through
three experiencing a greater than five-fold increase in viewing in the month after the release of season
four (vs. the prior month). Season four of ‘Stranger Things’ also showcased the effectiveness of our marketing strategy in driving conversation around our titles.”
On Thursday, Netflix said it is planning to introduce an ad-supported and cheaper subscription plan in partnership with Microsoft — a multinational tech corporation.
The new offering is aimed at boosting subscription numbers.