Netflix Loses Paid Users For the First Time in a Decade

Like most first-movers, it’s now facing rising competition for a flat market

Stephen Moore
Published in
4 min readApr 20, 2022


Image: Created by author

Shareholders expected Netflix to hit subscriber growth of 2.7 million in Q1 of 2022. So, when the company announced that it had lost 200,000 subscribers — the first decline in paid users since late 2011 — and warned of further problems ahead, the feeling in the room must have been less ‘Netflix and Chill,’ and more ‘ Netflix and OMFG it’s over.’

In startling contrast to recent fortunes, the company said it expects to lose a further 2 million subscribers in the next quarter. For context, Netflix added 3.98 million paid users during the same period a year ago. In a letter to shareholders, the company played the role of Captain Obvious, stating, “Our revenue growth has slowed considerably,” adding that “we’re not growing revenue as fast as we’d like.”

In an industry where growth is the only metric considered, this is as a big red flag as it gets.

When the news broke, Netflix’s share price tanked as much as 25% in after-hours trading, compounding the stock’s decline over the past six months. The stock price was sitting at an all-time high of $690 in November 2021, but it has been sliced in half on the back of several disappointing quarters.

The company blamed several factors; the suspension of services in Russia, increased competition, and password sharing. Netflix has over 220 million paid subscribers and believes the service is being shared with an additional 100 million households. So, in theory, based on the U.S. price for a standard plan ($15.49 per month), the company is losing millions in monthly revenue. And with things getting tighter and stock price lowering, Netflix has started to crack down on password sharing, testing out a feature that would prompt subscribers to pay extra if they were sharing the service with people outside their own household. And though it didn’t go as far as saying it, it admitted its content has been lacking, reassuring investors that the company would “improve “all aspects of Netflix — in particular, the…