What you need to know
- Netflix has just released its Q2 2022 financial earnings report.
- The streaming giant lost roughly 1 million subscribers, less than the expected 2 million.
- Despite the losses, revenue grew compared to the previous quarter.
Netflix announced its Q2 2022 financial earnings on Tuesday, reporting a bigger loss of nearly 1 million subscribers.
Compared to the expected 2 million subscriber loss, that's relatively good news for Netflix. However, it further solidifies a shift for the company, which saw its first subscriber loss in a decade earlier this year, losing 200,000 paid users.
That said, despite the exodus of subscribers, the company managed to gain revenue in Q2, which grew from $7.8 billion to nearly $8 billion. That's likely a result of the streaming giant raising its prices for U.S. and Canadian subscribers earlier this year.
That said, increasing prices are likely among the many reasons why Netflix is bleeding subscribers. Given the growth of competing streaming services, customers are likely finding cheaper alternatives to consume content.
Earlier this year, Netflix hinted that it would likely introduce an ad-supported tier to attract more users and appease subscribers who either left or are considering leaving. More recently, the company announced that it would partner with Microsoft to power its ad services, which it plans to launch in early 2023.
The company is also taking a harsher stance on password sharing, with recent tests in Latin America costing as much as $3 per additional household. The company plans to roll out an "easy-to-use paid sharing offering" in 2023.
Many have speculated that Netflix's recent strategy with season four of "Stranger Things" may have helped save it from much larger losses. The company released the first part in May while waiting to release the final two episodes of the season in July after the quarter ended. Netflix touts 1.3 billion hours viewed of season four, making it the biggest season of English TV on the platform.
The company has also garnered additional hype by announcing the second season of its popular Squid Game series.
"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 in its letter to shareholders on Tuesday.
Meanwhile, the company's streaming woes may start to ease, with an expected growth of more than 1 million subscribers in Q3. CNBC notes that analysts expect subscriber growth of as much as 1.8 million. That said, it won't necessarily mean the end of Netflix's streaming woes as competition (and content) heats up among rival streaming services.
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Derrek is a long-time Nokia and LG fanboy who loves astronomy, videography, and sci-fi movies. When he's not working, he's most likely working out or smoldering at the camera.