After years of growth, Netflix suffered the loss of subscribers for the first time in a long time. In order to attract new customers, a taboo could now be broken.
Netflix has seen its subscriber base decline for the first time in more than a decade. In its business figures for the first quarter of 2022, published on Tuesday, the US streaming service put the number of its subscribers worldwide at 221.6 million. That was 200,000 fewer than at the end of last year. Those sobering numbers sent Netflix shares down 26 percent to $258.39 in after-hours trading in New York.
Netflix was actually anticipating a different trend — adding 2.5 million more subscribers. Analysts were expecting an even bigger increase. The streaming service had benefited greatly from the corona pandemic over the past two years, which meant that people around the world were spending much more time at home with films and series than before – this has resulted in a strong growth in the customer base.
Netflix attributed the recent decline, among other things, to the ban on its service in Russia as a result of the Ukraine war. The measure paralyzed around 700,000 subscriptions over the quarter. The company also faces stiff competition from streaming services from Apple and Disney. Despite the recent decline, Netflix is still well ahead of the competition. For comparison: The big rival Disney + had almost 130 million customers at the end of 2021.
Netflix is thinking about a new subscription model
Netflix identified another impediment to its growth that multiple households often share a subscription. In addition to the 221.6 million subscribers, the company estimates that more than 100 million households watch Netflix through shared subscriptions without being a registered subscriber.
“We’re not growing our revenue as fast as we’d like,” Netflix said. The company reported revenue of $7.9 billion for the first three months of the year. The profit was, however, at 1.6 billion dollars and thus below that of the corresponding period last year. In the first quarter of 2021, Netflix had made a profit of 1.7 billion dollars.
To get growth going again, Netflix could even shake one of its biggest taboos in the future and introduce a cheaper streaming subscription with interspersed commercials. Netflix has never had anything like this before. CEO Reed Hastings has had little for it so far. Without presenting concrete plans, he suddenly showed himself open and explained that an offer supported by advertising could make “a lot of sense”. Netflix wants to work on such a solution in the next one to two years.
Source: Stern
Jane Stock is a technology author, who has written for 24 Hours World. She writes about the latest in technology news and trends, and is always on the lookout for new and innovative ways to improve his audience’s experience.
