Netflix In Shock As 200,000 Users Closed Their Accounts In 90 Days; Cheaper, Ad-Supported Plans Coming Soon?
How Did This Happen?
That being said, the American streaming firm’s customer base fell by 200,000 subscribers during the January-March period, as mentioned in its quarterly earnings report released Tuesday.
For the first time Netflix’s subscribers have fallen since the streaming service became available throughout most of the world outside of China six years ago.
This drop is also affected by Netflix’s decision to withdraw from Russia to protest the war against Ukraine.
Thus resulting in a loss of 700,000 subscribers.
Why Would This Happen?
From Netflix’s part, it has acknowledged that the problems are deep rooted by projecting a loss of another 2 million subscribers during the April-June period.
So far, Netflix shares will have lost more than half of their value this year.
Further, wiping out about $150 billion in shareholder wealth in less than four months.
It is now clear that Netflix is grappling with an imposing challenge, said David Wagner, Aptus Capital Advisors analyst in a research note further adding that “They are in no-(wo) man’s land,” Wagner wrote in a research note.
Prior to this, during 2011, Netflix absorbed its biggest blow of losing 800,000 subscribers.
This was affected by the result of unveiled plans to begin charging separately for its then-nascent streaming service, which had been bundled for free with its traditional DVD-by-mail service.
In response, customer backlash elicited an apology from Netflix CEO Reed Hastings for botching the execution of the spin-off.
In the last five quarters , this is the fourth time that Netflix’s subscriber growth has fallen below the gains of the previous year.
Which has been further magnified by stiffening competition from well-funded rivals such as Apple and Walt Disney.