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Highlights
- Netflix has lost around 200000 subscribers in the recent quarter.
- To recover losses, Netflix plans to limit password sharing protocol and incorporate advertisements.
- However, no definitive plan for the price range and new advertisement policy have been released yet.
Binge-watching captured significant light in the lives of people globally during the Covid-19 pandemic. When all other means for “chilling” were restricted, binge-watching became the go-to rescuer. “Netflix and chill” has been a hit mantra. However, after hitting the peak in late 2021, the American subscription streaming service and production company seems to be experiencing gloomy days in 2022.
Netflix losing subscribers
On April 19, Netflix announced that the platform had subscribers in abundance. The company was flourishing in 2021, and its share value reached its peak in November 2021. But currently, shares are down about 60% from their peak value. This is a rather massive shock for Netflix, as its shares have hit the lowest level since November 2019.
The movie and TV series streaming platform has lost around 200000 subscribers in the recent quarter. If different policies are not taken into the roadmap, the company may lose another 2 million subscribers in the upcoming quarter. It’s the first fall in the subscriptions of Netflix in more than a decade.
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Plan next: end password sharing, bring in ads
To combat the plunging subscriptions, the streaming company plans to end the password sharing facility on its platform. According to the company’s report, around 222 million subscribers have shared their passcodes with their friends and families; thus, about 100 million people are availing of the platform’s services free of cost.
Consequently, the contingency plan is to limit the password sharing protocol. The company may implement the policy that it has already executed in Costa Rica, Chile, and Peru. The subscribers can share their Netflix accounts with their people by paying a small amount of money.
Additionally, till now, Netflix has restrained from advertisements. However, it believes that if people want to retain lesser subscription costs and can tolerate the advertisements, it might shoot two targets with a single arrow.
Netflix Loses 25% After Losing Subscribers
Why have subscriptions fallen?
Apart from the password sharing facility, there are several other reasons behind the fall in Netflix’s subscribers. For instance, Netflix and other movie streaming platforms became the go-to ways for relaxing and chilling at home during the pandemic. However, now as restrictions are easing across countries, the heed paid to Netflix is drowning.
Secondly, as Russia invaded Ukraine, Netflix withdrew its services from the country, causing another fall in subscribers at a mass rate. Simultaneously, the competition among the market peers such as Disney, Amazon Prime and others is also cutthroat.
Besides, skyrocketing prices because of the pandemic-inflicted supply chain woes and the Russian invasion have tightened the spending capacity of households.
ALSO READ: Netflix, TikTok shut down operations in Russia to avoid crackdown
All in all, a plethora of reasons has led to the massive fall in Netflix’s subscribers. Thus, the company is projecting to incorporate new policies for its platform. However, no definitive plan for the price range and new advertisement policy have been released yet.
