1M Netflix subscribers leave in Q2 2022; ad-supported tier coming in 2023

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In Netflix’s second quarter, analysts had predicted significant declines in paying members, but the company’s financial report released today shows that things are not as bad as initially thought. 970,000 members were dropped from the site between April and June, compared to the predicted 2 million losses. After-hours trading saw a 7 percent gain in shares.

image credits: pehalnews

To ensure that the 100 million households that do not pay for the service but use shared passwords aren’t exploited, Netflix has set a 2023 deadline.

Although the loss of 1 million paying clients may appear to be a significant blow to the company’s bottom line, sales increased by 8.6 percent still. According to Netflix, the increase in average paying customers was due to an increase in subscriptions and ARMs (Average Revenue per Membership). Netflix lost $339 million owing to the impact of the foreign currency exchange rate.

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The high dollar has an adverse effect on the company’s dollar-denominated performance as it expands its worldwide market share. Netflix also cautions investors about impending difficulties and provides updates on the company’s short- and long-term strategies for increasing revenue.

According to the company’s Q3 2022 prediction, there would be an additional 1 million members, up from 4.4 million in Q3 2021.

With Microsoft on board for the ad-supported tier, Netflix hopes to launch the new plan in “early 2023,” according to the company’s plans. Once Netflix has a better understanding of how the new strategy works, it will roll it out to more areas. The corporation expects that this would lead to an increase in the number of paying customers.

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We’ve long predicted that Netflix will eventually crack down on password-sharing members next year. In addition to the 200 million homes that currently pay their bills, the research estimates that over 100 million households do not. New ideas and features will be implemented after the firm settles on a way.

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