Netflix Considers Advertising as Membership Declines

Dan Meier 20 April, 2022 

Netflix has reported 200,000 membership cancellations for Q1 2022, prompting the company to double down on introducing advertising to the streaming platform.

The quarterly report marks the first subscriber losses for the service since 2011. Netflix warns of a further two million cancellations in Q2.

As a result the company plans to crack down on password sharing, a practice it estimates being used by more than 100 million households. Netflix is “working super hard” on ending account sharing, said CEO Reed Hastings. “When we were growing fast, it wasn’t a high priority,” he noted.

Hastings also reiterated the suggestion that Netflix could introduce an ad-supported model, following in the footsteps of Disney and HBO. Despite being “a big fan of the simplicity of subscription”, the streaming boss admitted: “It’s pretty clear that it’s working for Hulu. Disney is doing it. HBO did it.”

Switching off

The Netflix exodus falls in line with record levels of subscriber churn in the UK and US. The rising cost of living in Britain has forced consumers to prioritise their bills, and naturally the multiple streaming services they signed up for during lockdown appear to be getting the chop.

Similarly in North America, the company reported that 600,000 terminations in the US and Canada resulted from Netflix raising its prices for the second time in 18 months.

Further Netflix losses stemmed from pulling its service from Russia, losing 700,000 subscribers in the process.

The company said growth in Japan and India partially offset the cancellations, still boasting a global subscriber base around 220 million. But the influx of streaming competitors and increase of living expenses point to more deductions in the company’s near future.

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