For the first time in over a decade, Netflix has lost subscribers
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For the first time in almost a decade, the number of Netflix customers has decreased. According to the company’s announcement on Tuesday, the streaming service lost 200,000 customers in the first three months of the year.
The falls occurred when the company boosted pricing in major regions such as the United States and the United Kingdom while exiting Russia. However, Netflix has warned that more losses are on the way, and it has signalled that as it rushes to sign up new subscribers, it will begin to tighten down on account sharing.
In October 2011, the company lost members for the first time in a quarter. It still has over 220 million subscribers worldwide.
According to the company, Netflix lost 700,000 members as a result of its decision to leave Russia following the Ukraine conflict. Another 600,000 people in the United States and Canada have cancelled their subscriptions as a result of the price rise.
The company’s sales increased 9.8% to more than $7.8 billion (£6 billion) in the first three months of this year compared to the same period last year. Profits dropped more than 6% to $1.6 billion, indicating a downturn from previous quarters.
Sign-ups from other countries, such as Japan and India, helped to offset losses in the quarter.
As it seeks to expand, the company said it is concentrating on overseas markets and figuring out how to reach the estimated 100 million people who share household accounts, including more than 30 million in the United States and Canada.
According to research from market research firm Kantar, households in the UK cancelled more than 1.5 million streaming subscriptions in the first three months of the year, with 38 per cent claiming they wanted to save money, the highest proportion ever.
Netflix is also up against a lot of competition, with companies like Amazon and Apple, as well as traditional media corporations like Disney, investing heavily in their online streaming services.
Following the revelation, the company’s stock dropped more than 20% in after-hours trading in New York, wiping more than $30 billion off its market value.