How Netflix lost subscribers for first time in a decade
For the first time in a decade, OTT giant Netflix has lost customers in a quarter. Compared to the last quarter of 2021, the company has reported a loss of 200,000 subscribers. To make matters worse, it forecasts an even bigger loss of up to 2 million customers in Q2 of 2022. The report has sent the streaming giant's stocks down by over 20%.
Why does this story matter?
It's not all rainbows and unicorns for Netflix anymore. The original disruptor in the entertainment industry is faced with some pertinent questions as it sees a decline in revenue and subscribers. With more services vying for the attention of the viewer with attractive plans, the streaming behemoth is facing an identity crisis. What it chooses has the potential to define the streaming landscape.
Suspension of services in Russia led to loss of customers
Netflix attributes its loss of subscribers to a slew of factors. A more competitive streaming landscape along with an increase in price, password-sharing, and a slowdown in broadband and Smart TV adoption are identified as the main causes of the downtrend by the company. It has also cited factors like the Russia-Ukraine war which forced it to shut shop in the former.
Password-sharing slows down growth in many markets: Netflix
"Our revenue growth has slowed considerably," said Netflix in its letter to shareholders. About the loss of customers in the US and Canada, the company said that it was "largely the result of our price change which is tracking in-line with our expectations." "It's harder to grow membership in many markets," the streaming giant noted while sharing its worry about password-sharing.
The company is rethinking its stance on advertising-supported tier
In the earnings report sent to shareholders, Netflix says that it plans to get back on track by improving the quality of programming, recommendations, story development, and content creation. There are also signs that the company is slowly reconsidering its staunch stance against an advertising-supported tier. Netflix has also plans to diversify its revenue streams. Its ever-growing interest in gaming business points to that.
Reduced prices increased user engagement in India in Q1
Amid growing concerns globally, Netflix can be happy about its performance in India and the APAC region. Since reducing its prices late last year in India, the platform has seen an uptick in customer engagements. In the wider Aisa Pacific (APAC) region that includes Japan, India, Philippines, Thailand, and Taiwan, the streaming giant added 1.09 million paid subscribers in Q1 of 2022.
