For the first time in a decade, Netflix has reported a decline in subscriber numbers. Tuesday, the streaming giant revealed it lost 200,000 subscribers in the first quarter of the year, the first time it lost subscribers since 2011. Furthermore, filings seem to suggest Netflix believes it could lose upwards of another two million subscribers by the end of the year, potentially making it the streamer's worst year on record.
"Our revenue growth has slowed considerably as our results and forecast below show," Netflix executives wrote in a press release to its shareholders.
The letter then went on to partially blame the practice of password-sharing for the company's shortfalls.
"Streaming is winning over linear, as we predicted, and Netflix titles are very popular globally. However, our relatively high household penetration – when including the large number of households sharing accounts – combined with competition, is creating revenue growth headwinds," the letter added. "The big COVID boost to streaming obscured the picture until recently. While we work to reaccelerate our revenue growth – through improvements to our service and more effective monetization of multi-household sharing – we'll be holding our operating margin at around 20%."
Still, the streamer is very much dedicate towards it massive spending on original content in hopes of getting some of that subscriber share back.
"Key to our success has been our ability to create amazing entertainment from all around the world, present it in highly personalized ways, and win more viewing than our competitors," the letter reads. "These are Netflix's core strengths and competitive advantages. Together with our strong profitability, we believe we have the foundation from which we can both significantly improve, and better monetize, our service longer term."
Netflix stock closed at $348.42 per share, down some 40 points from the beginning of the year. Earlier this year, Netflix unveiled plans to increase pricing for its packages, with the service costing upwards of $20 per month for its UltraHD package.