Netflix loses 2 lakh subscribes within three months
New Delhi: On Tuesday, April 19, 2022, Netflix revealed that it lost nearly two lakh subscribers in the first quarter of 2022. The company stock value tumbled to 26 percent, erasing $40 billion from its stock market value.
The OTT giant cited geopolitical tensions due to the Ukraine-Russian war that suspended services in Russia, increasing inflation, cut-throat competition, and corona virus-related disruptions as some of the reasons for the loss of subscribers.
According to Netflix, the event happened or the first time in decades and the company predicted further losses. In a letter to shareholders, Netflix wrote, “Macro factors, including sluggish economic growth, increasing inflation, geopolitical events such as Russia’s invasion of Ukraine, and some continued disruption from COVID are likely having an impact as well.”
“In addition to our 222m (million) paying households, we estimate that Netflix is shared with over 100m additional households, including over 30m in the UCAN (US plus Canada) region,” the company said.
“Competition for viewing with linear TV with YouTube, Amazon, and Hulu has been robust for 15 years. However, as traditional entertainment companies realised streaming is the future, many new streaming services have also launched over the last three years,” Netflix had said in a statement.
Netflix believed that the company’s growth in the last two years amid the global pandemic had “clouded the picture by significantly increasing our growth in 2020, leading us to believe that most of our slowing growth in 2021 was due to the COVID pull forward.”
Netflix CEO Reed Hastings hinted at ad-supported, low-priced version. “Those who follow Netflix know that I am against the complexity of advertising and a big fan of the simplicity of subscription. But, as much as I’m a fan of that, I’m a bigger fan of consumer choice,” Hastings said.
The company is also looking for methods to monetise households that share Netflix accounts in Latin America. The platform had slashed subscriber rates in December 2021, with plans starting from Rs. 149 instead of Rs.199 per month for Indian viewers.
(Avya Mathur)
