Do you use someone else's Netflix account? You just made them lose 2 lakh users

After making massive gains during the pandemic, Netflix is looking at huge losses in 2022.

The world’s largest streaming video company said that it lost 2,00,000 (2 lakh) subscribers in the first quarter of 2022. The company had a forecast of adding 2.5 million (25 lakh) subscribers during this period.

According to Netflix’s estimates, it could lose up to 2 million (20 lakh) subscribers in the upcoming second quarter.

Netflix said that inflation, the war in Ukraine and fierce competition are some of the reasons for the loss of subscribers for the first time in more than a decade.

The streaming platform currently has 222 million subscribers worldwide.

Netflix Inc tumbled 26 per cent and about USD 40 billion of its stock market value was erased after Wall Street's opening bell on Tuesday, reported Reuters.

Take a look at what led to Netflix’s recent loses and how they are planning to get back on track:

PASSWORD SHARING

Netflix said it has purposefully allowed password sharing because it helped in getting users hooked on the service. "But they have created confusion about when and how Netflix can be shared with other households," said Netflix CEO Reed Hastings in the company's quarterly shareholder letter.

The streaming giant also warned that a global crackdown on password sharing is coming, reported CNBC. The company said more than 100 million households were likely using a shared password worldwide and it wants them to start paying.

WAR IN UKRAINE

The company has also blamed the quarter-over-quarter losses to suspension of its services in Russia. Netflix said that suspending services in Russia after the Ukraine invasion resulted in the loss of 700,000 (7 lakh) members. 

Last month, Netflix had announced it is shutting its operations in Russia and that no new customers will be able to sign up. The streaming service has close to 1 million (10 lakh) subscribers in Russia.

FIERCE COMPETITION

Netflix has also acknowledged that a fierce competition from rivals has affected its growth. Platforms like Disney Plus, HBO Max, Apple TV, Hulu, Discovery Plus, Paramount Plus and others are not only growing in the US but also making a mark in the global market. 

With other good options available, Netflix may not be the 'go-to-place' for online viewing for many people. This has already lead to slowing of subscription growth and will affect Netflix's profits in the near future also.

LACK OF SUCCESS IN INDIA

Even though subscription-based video services are popular mostly in Tier-1 and Tier-2 cities in India, Netflix had big hopes from the country considering it is world’s second largest mobile smart phone market after China.

But it never had the kind of success it was expecting. According to a report in Fortune India, Netflix has just around 4 million subscribers in India, while its competitor Amazon Prime Video has over 17 million subscribers and Disney Plus Hotstar has around 46 million.

The lack of success in what could have been one of the company's biggest markets may have affected Netflix’s growth and led to losses.

"Indian market is a priority for us and after investing Rs 3,000 crore in last two years, the company is planning on investing more in the country," Netflix CEO told Business Today in an interview last year.

NETFLIX WITH ADS?

For years, Netflix has resisted itself from using advertisements on its platform, and it's one of the reasons why the video streaming platform is considered one of the best in the business. But, now it seems, Netflix is 'open' to offering lower-priced plans with ads.

Netflix CEO said that he has been against the complexity of advertising and a big fan of the simplicity of subscription.“But as much as I am a fan of that, I am a bigger fan of consumer choice, and allowing consumers who would like to have a lower price and are advertising-tolerant to get what they want makes a lot of sense,” he said.