Netflix Loses Fewer Subscribers Than Expected in 2022

970,000 people dropped out of the service, far less than the initial expectation of 2 million.

Shares of Netflix (NFLX) soared 7% in the extended sessions after the streaming company disclosed that it had lost fewer members than previously estimated..

More than a million fewer Netflix members left during the second quarter than the company had anticipated. Another 1 million additional members are expected in the third quarter, according to the company.

Revenue grew 8.6% to $8 billion, which was lower than expected. Netflix made $1.4 billion in profit, an increase of 6.5 percent from last year.

The company also warned of the impact on its overseas revenue, which accounts for around 60% of overall income, of the rise of the US dollar.

In early 2023, Netflix plans to launch a lower-cost, ad-supported tier. On the heels of Netflix’s announcement that Microsoft would be its ad-supported partner, this comes as a surprise. “Probably start in a couple of markets” where advertising spending is significant, according to the company.

So far this year, Netflix shares have lost more than 66% of their value. Due to Netflix’s success, shares of Disney (DIS), Warner Bros., and Paramount Global also saw gains.

One million paying customers will be re-acquired in the third quarter of 2021, bringing the total to a conservative 221.67 million subscribers.

New subscription models

Netflix is looking into ways to limit the amount of information that may be exchanged outside of the home. Netflix now charges the equivalent of €3 extra in certain Latin American nations for sharing an account with a user who is not a household member.

It has been revealed that the streaming service is looking into a variety of payment options before changing its cost structure for all its customers.

As recently as April, Netflix executives indicated that they would begin offering an ad-supported, lower-priced subscription option.

Earlier this week, the company announced a three-tiered subscription structure, with the least option costing $10 per month in the United States.

There have been approximately 400 layoffs, most of them in the United States, as a result of declining subscriptions.

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