13:38 25th Apr, 2022
Netflix subscriber base blown to bits | TechTree.com
Netflix subscriber base blown to bits
Netflix lost 200,000 subscribers in Q1 and may offer cheaper ad-supported plans.
Netflix's stock tumbled by 26% yesterday, erasing $40 billion of its stock market value. The stock was already down 42% at the beginning of this year as compared to the beginning of last year.
Netflix blamed inflation, competition, password sharing, and the war in Ukraine and the suspension of its services in Russia which resulted in a further loss of 700,000 subscribers.
Clearly Netflix’s forecast of adding 2.5 million subscribers was wildly inaccurate.
The negative subscriber growth is prompting Netflix to contemplate offering a cheaper plan with ads, citing the success of similar plans from rivals Disney+ and HBO Max.
"Those who have followed Netflix know that I've been against the complexity of advertising, and a big fan of the simplicity of subscription," said Netflix CEO Reed Hastings. "But, as much as I'm a fan of that, I'm a bigger fan of consumer choice."
What Hastings meant to say is that as much as he is a fan of subscription, he is a bigger fan of making money so if advertising is what it takes to make money, you can bet your house that he’ll do it. It’s not about consumer choice, it’s about corporation choice.
Streaming services are not the only form of entertainment vying for consumers' time. The latest Digital Media Trends survey from Deloitte, released in March 2022, revealed that Gen Z, those consumers between 14 to 25, spend more time playing games than watching movies/TV shows and listening to music combined.
The majority of Gen Z and Millennials said they spend more time watching user-created videos on TikTok/YouTube than watching films or shows on streaming services.
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