The struggle of Netflix to increase its subscriber base took a turn for the worse in the first quarter of 2022. The company lost 200,000 subscribers globally in Q4 compared to the previous quarter, and it expects even bigger losses in the coming quarters. Netflix anticipates losing up to 2 million subscribers in the second quarter.

“Our revenue growth has slowed considerably,” Netflix acknowledged in its letter to shareholders. “Covid 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.” Netflix had approximately 222 million subscribers at the end of the quarter, making it the largest streamer — but it is facing a slew of challenges.

Netflix announced its first monthly subscription increase in two years in January. The following is contained in today’s earnings report: Netflix claims to have lost 600,000 customers in the United States and Canada, which it attributes to “largely the result of our price change, which is tracking in line with our expectations.”

As it seeks to maximise revenue from existing users, the streaming behemoth has recently indicated that it will tighten the screws on customers who share passwords and login information. And it’s not a minor issue: Netflix now estimates that up to 100 million households use the service through shared passwords. As a result of the situation, “it’s harder to grow membership in many markets,” according to Netflix.

The drop in signups reflects a more competitive streaming landscape: Netflix is competing with more rival services than ever before, all vying for consumer eyes and attention.

The competition is also becoming more affordable, with Disney Plus announcing plans to launch a low-cost, ad-supported tier later this year.

As a result, it’s not surprising that Netflix’s growth has slowed in recent years. Following Russia’s invasion of Ukraine in March, the company suspended service in the country. According to today’s earnings report, Netflix lost approximately 700,000 subscribers as a result.

So, what’s next? “Our plan is to reaccelerate our viewing and revenue growth by continuing to improve all aspects of Netflix — in particular the quality of our programming and recommendations, which is what our members value the most,” Netflix said in its earnings letter. “On the content side, we’re doubling down on story development and creative excellence.” “On the product side, we recently launched ‘double thumbs up’ so members can better express what they truly love versus simply like – enabling us to continue to improve our personalised recommendations and overall experience,” the company said. Netflix also claims that international success is critical to its long-term success. “Over the long term, much of our growth will come from outside the United States,” the company stated.

Netflix has delved deeper into gaming as it seeks new ways to attract new customers. It recently announced a collaboration with Exploding Kittens to create a mobile game as well as an animated series.

To begin with, Netflix never had high hopes for adding new subscribers this quarter. The company predicted a 2.5 million subscriber increase compared to the 4 million it gained in the same quarter last year.

It issued that forecast in January after falling short of its Q4 growth projections, despite the release of high-profile original films Red Notice and Don’t Look Up.

Netflix’s stock plummeted on that news, so it’s no surprise that with today’s results being significantly worse than expected, the stock plummeted once more in after-hours trading.

This quarter didn’t have quite as much big-budget entertainment. Instead, the return of Bridgerton and other fan favourites was emphasised by Netflix.

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