The Once Untouchable Streaming Giant Has Become Touchable: Netflix Continues Losing Subscribers

Netflix Inc. NFLX continues to push a corporate rebrand, as the one time untouchable streaming giant is seeing additional subscribers leaving the platform.

What Happened: InvestorPlace reports that the company is expecting to lose two million subscribers in the second-quarter of 2022. This comes as the company experienced its first loss of subscribers in a decade during first-quarter 2022.

In its first quarter earnings report, Netflix reported a 200,000 drop in subscribers, citing issues such as inflation, continued disruption from COVID, and Russia’s invasion of Ukraine.

The previously mentioned corporate rebrand includes bringing in new and intriguing titles, as well as cutting down on password sharing. The corporation formed a partnership with esteemed show writer Shondra Rhimes who brought two of the platform's hits to fruition. Those series were Bridgerton and Inventing Anna, which fostered a combined 1.139 billion hours viewed on the platform. 

Netflix also cites introducing its new “double thumbs up” software, which will allow its AI (artificial intelligence) software to better curate suggested pages for subscribers. 

While these changes seem to be getting positive results for the company, the rebranding also includes ideas which will change the way consumers use the platform. 

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For many years Netflix was open to password sharing, which allowed multiple people, in different households, to use one password. Yet, as the company seeks to grow profits and the number of subscribers, it has begun to crack down on password sharing.

NPR has shared that Netflix will test a new price hike in three countries: Chile, Costa Rica and Peru. The program will include a $2.99 price increase for accounts which have more than two profiles associated with one log-in.

NPR interviewed various customers of the platform and heard numerous complaints due to the change. One interviewee asked, "How do you expect families to handle password sharing in the case of divorcees, their children, or college students away from home?"

Competition Gaining Ground: With Netflix losing subscribers, its main competitor The Walt Disney Co. DIS continues to grow their main streaming service, Disney+. In the first three months of 2022, the service gained 7.9 million paid customers, beating analysts expectations of 5.2 million new paid customers, Variety News reports.

Disney+ continues to close the gap with Netflix, with 205.6 million subscribers compared to 221.6 million Netflix subscribers.

Even with Netflix losing subscribers, it is still expected to grow revenue by 10% in the second quarter, but growth is likely to slow as the company continues to lose subscribers.