LOS GATOS, Calif. — Netflix today announced its financial results for the first quarter of 2022, which show the streamer lost 640,000 paid subscribers in the U.S./Canada (UCAN) region during the quarter, which ended March 31.
By comparison, in the same quarter of 2021, Netflix added 450,000 paid subscribers in the UCAN region. The company’s total number of UCAN paid memberships is now 74.58 million, according to information in a Netflix letter to its shareholders. (Please see chart below.)
Netflix’s revenue in the UCAN region in Q1 2022 increased to US$3.35 billion, compared to US$3.17 billion in Q1 2021.
Overall, Netflix’s total global revenue was US$7.9 billion in the first quarter of 2022, a 9.8% year-over-year increase compared to the US$7.1 billion in global revenue the company reported in Q1 2021.
The company’s global paid subscribers now total a little under 222 million, with the streamer reporting a drop of 200,000 subscribers overall during Q1 2022. A year ago, Netflix reported 4 million paid net adds in Q1 2021.
Netflix notes in its shareholder letter “the suspension of our service in Russia and winding-down of all Russian paid memberships resulted in a -0.7m impact on paid net adds; excluding this impact, paid net additions totaled +0.5m.”
Referring to the problem of Netflix subscribers sharing accounts with other households, the company’s letter says, “in addition to our 222m paying households, we estimate that Netflix is being shared with over 100m additional households, including over 30m in the UCAN region.”
Netflix says in its shareholder letter its revenue growth “has slowed considerably” and one of its focuses will be “more effective monetization of multi-household sharing” to reaccelerate its revenue growth.
The company also says the Covid pandemic “clouded the picture by significantly increasing our growth in 2020, leading us to believe that most of our slowing growth in 2021 was due to the Covid pull forward.”
For the second quarter of 2022, Netflix forecasts its paid subscribers will decrease by 2 million, compared to paid net additions of 1.5 million in Q2 2021. The company also projects its revenue will grow approximately 10% year-over-year to reach $8.1 billion in Q2 2022.
It was also revealed today Netflix is exploring introducing a lower priced ad-supported subscription option. “Think of us as quite open to offering even lower prices with advertising as a consumer choice,” said Netflix co-CEO Reed Hastings during an earnings interview today. (This follows an announcement from Disney last month that it plans to introduce a cheaper, ad-supported subscription option for its streamer Disney+.)
For Netflix’s Q1 2022 financial results and letter to shareholders, please click here.
Chart borrowed from Netflix’s letter to its shareholders.
