Expect to drop 2 million subscribers
More than two hundred thousand
The subscribers who left (out of a total of 221.6 million subscribers worldwide, in any case 6.7% more per year), are also associated with the closure of the service in Russia, which led to the abandonment of 700 thousand subscribers, the market appears to worry about the prospects. The video streaming group itself expects a decrease of 2 million subscribers in the current quarter.
Click on Shared Passwords
It prepares for countermeasures.
In his quarterly letter to contributors, anticipate that there will be global pressure on sharing passwords that allow use without a subscription payment. The company estimates that more than 30 million American and Canadian families use a common password to access content on the platform. Worldwide, according to Netflix, more than 100 million families are likely to use a shared password. If there was some tolerance initially for deploying the service, lost revenue, with a third of users not being paid, has become a problem for the company, which has yet to announce how to intervene.
Competition from Disney + and Amazon Prime Video
Intervention can be an increase in the cost of subscribers, but this solution will have many contraindications. While Netflix continues to grow in Asia, the US and Canada saw their subscriber count drop by 600,000 due to higher prices, in a complex market scenario. If the lockdown encouraged organ growth, the gradual overcoming of the health crisis caused the stimulus to decline. But above all, the success of platforms like Disney+ and Amazon Prime Video has also made the price component important in the competition.
Another hypothesis of it
Co-founder and CEO Reed Hastings also spoke, it will be possible to offer advertising sites specifically to reduce the cost of subscriptions, which makes people lose out on the privacy of video broadcasts. Those who follow Netflix know that I am against the complexity of ads and for the simplicity of the subscription. But I’m more impressed with the more choices for consumers, Hastings explained. Even if it was the fear of a possible change in consumer habits, with the loss of purchasing power due to inflation that could have changed spending priorities. It is also for this reason that the titles of Netflix competitors fell yesterday, such as Disney (minus 5.5%) or Amazon (minus 2.6%).
The economic situation is not tragic
At the level of economic accounts
At the moment, Netflix’s situation does not look tragic: in the first quarter, although the number of subscribers is less than 200 thousand at the end of 2021, Netflix generated sales of $ 7.9 billion from January to March, almost 10% More than in the first quarter of 2021 thanks to a 6.7% year-over-year increase in subscribers in addition to higher prices and a decrease in net profit from 1.7 billion to 1.6 billion due to increased production commitment. .
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