Netflix records 1.75mn new subscribers, shuts mailing DVDs business

Business Wednesday 19/April/2023 18:44 PM
Netflix records 1.75mn new subscribers, shuts mailing DVDs business

Palo Alto: Netflix on Tuesday announced that it added a net 1.75 million paid streaming subscribers in the first three months of 2023, with the Asia-Pacific region leading the growth, according to Asia Nikkei. The streaming giant also announced that it is shutting its business of mailing DVDs.

But its overall number of new members fell below Wall Street analysts' estimates, sending the US streaming giant's stock down more than 10 per cent at one point in extended trading, according to Asia Nikkei.

For the three months ended March 31, Netflix reported USD 8.2 billion in total revenue, up 3.7 per cent from a year earlier. According to Asia Nikkei, the Asia-Pacific contributed USD 934 million, up 2 per cent on the year. Excluding the impact of the US dollar's strength against most currencies in the region, Asia-Pacific revenue grew 10 per cent on a foreign-exchange-neutral basis.

The American streaming giant reported its first membership decline in a decade last year and lost more than 1 million subscribers in the first half of 2022, Asia Nikkei reported. But user growth started to rebound in the second half, thanks in large part to the Asia-Pacific region.

The past quarter was no exception, it added. The Asia-Pacific added a net 1.46 million paid subscribers, accounting for 83 per cent or so of the worldwide total net growth of 1.75 million. The global total of Netflix subscribers rose to 232.5 million by the end of March. Total net income for the quarter came in at USD 1.3 billion, an 18 per cent year-over-year decrease.

According to Asia Nikkei, Netflix shares plunged in after-hours trading on Tuesday after the earnings report before recovering to around their USD 333.70 close.

The company announced on Tuesday that it would delay the rollout of the paid password-sharing plan, which cracks down on sharing account credentials and charges extra for doing so.

Netflix had originally planned to impose the charge in more countries in the first quarter but decided to delay this to the second quarter.

"While this means that some of the expected membership growth and revenue benefit will fall in Q3 (third quarter) rather than Q2, we believe this will result in a better outcome for both our members and our business," Netflix said in a letter to shareholders on Tuesday.

On Tuesday, Netflix also said goodbye to the business it started out with mailing DVDs.

"Our goal has always been to provide the best service for our members but as the DVD business continues to shrink that's going to become increasingly hard," the company said in the letter.