Netflix has announced that it has lost subscribers for the first time in about a decade, and has revealed the number one reason why.
Netflix is obviously one of the few massive companies that saw a significant growth during the pandemic, and it's still doing OK.
But, in the first quarter this year it lost 200,000 subscribers, which is the first time in 10 years that numbers have dropped.
Furthermore, in a statement on Tuesday the streaming platform admitted that it's expecting to lose another two million subscribers in the next quarter between April and June.
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Releasing its first-quarter financial report, Netflix said that Russia’s war in Ukraine and the significant sanctions imposed had also taken a toll, but said that password sharing across multiple households was another factor.
The company statement said: "It's increasingly clear that the pace of growth into our underlying addressable market (broadband homes) is partly dependent on factors we don't directly control, like the uptake of connected TVs, the adoption of on-demand entertainment and data costs,
"We believe these factors will keep improving over time, so that all broadband households will be potential Netflix customers."
To throw these latest numbers into some context, Netflix had 221.84 million subscribers around the world, and that has now fallen down to 221.64 million.
Beforehand, Netflix had forecast that it would gain 2.5 million subscribers over the same period.
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To be fair, it lost around 700,000 subscribers when Russia invaded Ukraine, and that wouldn’t have factored into the forecast.
The world’s largest streaming platform has admitted that while account-sharing might have played a part in its growth, there could be as many as 100 million households watching someone else’s Netflix, including 30 million in the USA and Canada alone.
That's a lot of people sharing accounts.
The letter to shareholders continued: "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,
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"While we won't be able to monetize [sic] all of it right now, we believe it's a large short- to mid-term opportunity."
Netflix did enjoy good growth during the period of the pandemic when large swathes of the world were confined to their homes, but the subscriber growth has been more changeable since then, including a member drop in the US and Canada – its biggest market – last year for the first time since 2019.
What’s more, there have been other companies muscling into the same space.
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New rivals such as Disney+ and HBO Max have taken big strides, and other platforms are cottoning on to the new world of television.
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Topics: Netflix, Money, World News