Netflix has announced that for the first time in a decade its number of subscribers has gone down.
The streaming platform, famous for top shows like ‘The Queen’s Gambit,’ ‘Bridgerton,’ and ‘Inventing Anna,’ as well as a host of classic shows, has lost 200,000 subscribers in the first quarter of this year.
The platform operates on a subscription model, getting all its revenue from paying users which it then puts into its content. Last year alone Netflix put $17 billion into original programming.
After a big boost from the pandemic, with user numbers swelling to 222 million during long lockdowns with many left at a loose end, Netflix is now seeing a drop. The platform has blamed, amongst other things the war in Ukraine and rise in the cost of living leading to many tightening their belts.
The company has said it was launching a crackdown on users sharing their passwords, a practice believed to be happening in 100 million households.
In a statement to shareholders which addressed the drop in share price, Netflix said, "Our revenue growth has slowed considerably as our results and forecast below show.
"Our relatively high household penetration - when including the large number of households sharing accounts - combined with competition, is creating revenue growth headwinds."
Streaming in the immediate future
The platform says it expects 2 million users to cancel their paid subscriptions before July, with the growth of numbers during the pandemic obscuring the picture.
"The video streaming landscape has become fiercely competitive, and Netflix is not immune to its effects. As the cost of living continues to spike, consumers are evaluating every expenditure, including video streaming services," says Stefan Lederer CEO and founder of Bitmovin, a start-up that provides video streaming infrastructure to the BBC and New York Times, among others.
"Whether a customer stays or unsubscribes hinges on if a service offers excellent content and innovations that improve the quality of experience."
Netflix in Europe
After humble beginnings as a US-based DVD rental service, Netflix has grown into a worldwide phenomenon, adding roughly 109 million users between 2017 and 2020.
Its European market currently represents a large proportion of Netflix’s revenue, with as much as 36% of the population subscribing in some countries.
Norways represents the highest proportion of the population signed up to Netflix, with 1,968,164 people holding subscriptions. The UK is the second highest percentage wise at nearly one-fifth of the population having Netflix accounts, however due to the population differences that equates to 12,752,006 people.
Sweden, Switzerland, Denmark and the Netherlands all have between 15 - 17% of their populations paying for the streaming platform, with Belgium, Finland, Luxembourg, Germany and France falling between 12 - 14.5% penetration.
Meanwhile, eastern Europe and the Baltics bring up the rear with Slovakia, Hungary, Latvia, Croatia, Bulgaria and Romania polling at under 3.5% usage.
Netflix has courted controversy in Turkey (where over 3 million people have an account) earlier this year when it ran afoul of censorship laws with an LGBT character.
The platform lost 700,000 users in Russia when it joined the cultural exodus from the country over the war in Ukraine.