Tuesday, April 16, 2024

Netflix could be cheaper soon, but there is a catch…

Netflix released its quarterly report yesterday, and figures suggest the company is experiencing a drop in user numbers for the first time.


1 min read

A report released by the US company yesterday said the popular streaming platform lost as many as 200,000 subscribers worldwide in the first quarter of 2022. Although Netflix hoped to gain 2.5 million subscribers during this period, something unexpected happened – they lost quite a number of users. The company estimates it could lose up to 2 million subscribers in the second quarter.

In a letter to shareholders, Netflix said, among other things, that its revenue growth has slowed significantly, but that they remain the largest streaming platform with approximately 222 million subscribers worldwide.

These figures resulted in a sharp drop in the company’s stock market value, with Netflix shares losing 26% of their value, a loss of $ 40 billion.

At the beginning of the year, Netflix announced its first increase in subscriptions in two years in the United States and Canada, which greatly affected the reduction in the number of subscribers.


What is still a problem for Netflix is pass sharing, which is becoming more common. Namely, Netflix estimates that as many as 100 million households use the service through shared passwords. Some time ago, the company announced the fight against such users, but no concrete move has been made yet.

What is Netflix’s plan?

Reed Hastings, the company’s CEO, said the company could implement an interesting strategy, which could bring subscribers back to the platform. Namely, he states that although he is personally against advertising on the platform, the company is considering the introduction of a cheaper subscription, which would include ads.

So Netflix could indeed reduce subscription prices, in order to bring users back to the platform, but in return, users would be forced to watch ads on the platform. It is unclear how Netflix would include ads on the platform.






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