Netflix growth in 2022: Despite adding nearly 9 million paid streaming subscribers, revenue & profit declined

Netflix growth in 2022 brought as a mix bag for investors. While the number of global paid streaming subscribers went up, revenue and profit declined due to high acquisition cost of paid subscribers.

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The year 2022 has been a rollercoaster ride for the global streaming giant Netflix. In its 2022 earnings release, the company exceeded the Wall Street expectations by adding a significant number of paid streaming subscribers to its OTT platform. The number of Netflix subscribers reached an all-time high of 230.75 million in Q4 2022, with a 4% YoY growth. That’s the addition of approximately 7.662 million global paid subscribers in a quarter.

Out of the total 7.662 million net additions in Netflix global paid memberships in Q4 2022, a whopping 3.195 million came from the EMEA region alone. This is followed by 1.795 million from the APAC region, 1.763 million from Latin America, and 0.909 million from the United States and Canada.

Except US & Canada, every region saw a significant increase in the number of paid Netflix subscribers in during the entire 2022 compared to 2021. The US & Canada region lost 0.919 million paid memberships in 2022. While other regions such as EMEA added 2.693 million and Latin America added 1.738 million.

The biggest surprise came from the APAC region, where Netflix witnessed a massive growth in the paid memberships addition in 2022. The region added a whopping 5.391 million new paid members in the last 12 months ended December 31, 2022, bringing the total to 38.023 million. This translates to an impressive 16.5% YoY growth in Netflix APAC’s paid subscribers in 2022.

However, the growth in Netflix’s paid subscribers from APAC region is not as compelling as it seems when compared to its performance during the previous years. The region added 9.259 million and 7.140 million new subscribers in the span of 12 months ending December 31st, 2020 and December 31st, 2021, respectively. From an impressive 57% YoY in 2020 to 28% YoY in 2021, the year-over-year growth in Netflix’s APAC subscribers is nothing but a disappointment.

The Europe, Middle East and Africa (EMEA) and United States and Canada (UCAN) region, together, accounts for 65.5% of the Netflix’s global paid subscribers in 2022.

The EMEA region accounts for nearly 33.3% of Netflix’s total paid memberships by the end of December 2022, followed by 32.2% by the UCAN region, and 18.07% by Latin America. Interestingly, despite registering the highest growth over the last three years, the region still accounts for only 16.5% of the total Netflix’s subscribers across the globe.

Growth of Netflix’s subscribers 2022: Lost to Glory

It is worth nothing that 2022 has been a tough year for Netflix when it comes to the quarterly addition of new paid subscribers to the platform. In Q1 2022, the OTT platform lost more than 200,000 paid streaming subscribers worldwide. In Q2 2022, it further lost nearly 970,000 subscribers. If we do the math, Netflix lost 1.172 million global paid streaming subscribers in the first six months of 2022. The company took sign of relief in Q3 2022 when it recorded a net addition of 2.413 million new subscribers.

In the last six months of 2022, Netflix added approximately 10.08 million new paid streaming subscribers worldwide.

Last year, the US-based OTT giant implemented a number of strategies in an effort to grow its subscriber base. The password-sharing on Netflix is one such strategy. If an existing subscriber wishes to add a person not living in the same household to the membership, he or she must pay fees for adding a “extra member” subaccount. Sometime early this year, Netflix will soon start charging accounts for password sharing. This move will help company to get rid of freeloaders.

In addition to the password-sharing fees, Netflix has also launched lower-priced ad-supported plan, hoping to excite more people towards the OTT platform at a significantly lower acquisition cost.

Netflix Basic with Ads plan now cost $6.99/month in the US. This plan is available in Australia, Brazil, Canada, France, Germany, Italy, Japan, Korea, Mexico, Spain, the UK and the US.

In addition to streaming movies/series in various languages, the OTT platform allows its users to play games. Netflix games catalog has grown from 0 to 48 games in the last one year. Spry Fox, an award-winning independent studio, recently joined Netflix as the sixth in-house games studio. As the company continues to add more games with each passing quarter, an increasing number of gamers from all over the world are signing up for Netflix paid subscriptions.

Netflix Revenue and Net Income 2022

Despite adding a number of new paid subscribers to its platform, the growth in Netflix revenue and net income in 2022 left investors and industry analysts disappointed. The company’s revenue grew only 1.85% YoY in Q4 2022, to $7.85 billion worldwide. Overall in 2022, Netflix’s global revenue hit a record-high of $31.62 billion, with a 6.46% YoY growth.

On the other hand, Netflix’s net income tanked from $607.4 million in Q4 2021 to just $55.28 million in Q4 2022. That’s a massive 90.9% YoY decline. However, this was primarily due to a $339.97 million decline in Interest and other expenses that occurred during the fourth quarter. In whole 2022, the company’s profit was $4.49 billion, down from $5.12 billion in 2021.


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