Netflix has hit yet another snag.
The streaming giant was one of the first to hop on the new wave of hi-tech entertainment via monthly subscriptions, but with other options, its popularity is waning. While reporting first-quarter earnings Tuesday, Netflix revealed that it lost 200,000 subscribers in the first three months of 2022. That’s a far cry from the company’s expectations which was a boost of 2.5 million subscribers.
The devastating news was immediately detected in the stock price as it dropped 30% percent upon the market opening– causing the company a $45 billion loss and marking its worst day in more than 20 years. The huge drop in value can also be traced back to many users infamously sharing passwords with friends and family to get more bang for their bucks.
“In addition to our 222 million paying households, we estimate that Netflix is being shared with over 100 million additional households, including over 30 million in the [United States/Canada] region,” the company said.
The company is now looking to further crackdown on password sharing with hopes it will turn its recent misfortunes around.
“This is a big opportunity as these households are already watching Netflix and enjoying our service,” the company wrote in its letter. “Sharing likely helped fuel our growth by getting more people using and enjoying Netflix. And we’ve always tried to make sharing within a member’s household easy, with features like profiles and multiple streams. While these have been very popular, they’ve created confusion about when and how Netflix can be shared with other households.”
Netflix tried to cut down on everyone sharing the love last year with a pilot program in Costa Rica, Peru, and Chile to let users add additional members outside of their households if the company identified that a password was being shared.
The crackdown is expected to expand as COO Greg Peters and team continue to work out its kinks in favor of paying subscribers.
“We are trying to find a balanced approach here, that supports putting our members in charge,” Peters said on the company’s earnings call. “It’ll take a while to work this out and get that balance right,” Peters said. “My belief is that we will go through a year or so of iterating, and then deploying that.”