Growing Competition Causes Netflix To Lose Subscribers

CHARLOTTE, N.C. – The streaming giant Netflix lost subscribers globally and prepares to lose even more this Spring due to competition with rival services and increasing account sharing among its customers.

The streaming giant anticipated adding 2.5 million subscribers in its first quarter, the company’s projections were wrong as it ended the first quarter with 200,000 fewer subscribers than it had in the fourth quarter. 

The company stated what they call a  “revenue growth headwind” was caused by password sharing and increased competition from other streaming services.

Netflix stated that out of approximately 222 million paying households, their services were being shared with an additional 100 million viewers with no subscription.  The company mentioned it is currently testing a password-sharing subscription model that will build revenue by monetizing password sharing among viewers outside a household.  

Although the company’s sharing rate hasn’t changed over the last few years, the company believes that password sharing is preventing future growth.

Rival streaming services have also caused a rift in the company’s business.  Netflix announced its competitor, Walt Disney Co. has cheaper streaming services due to its ad-supported subscription. 

While Netflix doesn’t currently have plans to launch an advertising-supported service, chief operations officer, Spencer Neumann warned “never say never.”