Popular video streaming platform Netflix has announced that it lost nearly one million paid subscribers in the second quarter of this year. In the second-quarter earnings report, the company revealed that it lost 9,70,000 subscribers, which is more than the 2,00,000-member decline from the first quarter.
"The second quarter was better-than-expected on membership growth, and foreign exchange was worse-than-expected (stronger US dollar), resulting in 9 per cent revenue growth (13 per cent constant currency)," the company said in a statement.
"Our challenge and opportunity is to accelerate our revenue and membership growth by continuing to improve our product, content, and marketing as we have done for the last 25 years, and to better monetise our big audience," it added.
Netflix said it has 73.28 million paid subscribers in the US and Canada and 220.67 million worldwide and it expects to add one million in the third quarter.
According to Netflix, revenue increased 9 per cent year over year from $7.3 billion in 2021 to $7.97 billion this quarter.
In April, the platform reported a loss of 2 lakh paid subscribers in the first quarter of 2022 -- its first subscriber loss in over a decade.
Moreover, Netflix forecast a global paid subscriber loss of 20 lakh for the second quarter of 2022. However, it only lost half of that.
Meanwhile, Netflix has confirmed it is renegotiating deals to put ads on its platform and will launch first in countries that have more mature advertising markets.
Reed Hastings, Co-CEO of Netflix, said that while they lost about one million users instead of two million, the excitement is tempered by the less bad results.
"But looking forward, streaming is working everywhere. Everyone is pouring in. It's definitely the end of linear TV over the next five, 10 years, so I am very bullish on streaming. And then our core drivers are just continuing to improve," he told analysts after the company's earnings call late on Tuesday.
Greg Peters, Chief Operating Officer and Chief Product Officer, said that once they feel more confident in the ad monetisation, "then we'll sort of explore the next tiers of countries over time. So that's a dimension of growth".
"But I would say the initial response that we're getting from a brand and advertiser perspective is quite strong. This (ads) is going to start small relative to our total revenue mix, but we think we can grow it to be substantial over a period of time," Peters noted.
Hit by a dwindling user base, streaming giant Netflix has partnered with Satya Nadella-run Microsoft for its new ad-supported subscription plan that the company plans to launch in early 2023.