Netflix in its first-quarter earnings report of 2022 revealed some shocking results, that washed $40 billion of the company’s value.
First among them is the losing over 200K subscribers in this quarter, which is the first dip in a decade. Netflix even warned investors that two more million people may leave the platform soon. To cope, the company shared plans of monetizing the free household customers and even trying ad-supported tiers.
Netflix New Plans For Growth
Netflix is undoubtedly the current market leader in the paid streaming industry, but it’s losing its fans so rapidly that, the company reported losing over 200,000 subscribers in Q1 of 2022. A huge reason for this is the cutting off services to Russians, and also being so lenient on password sharing.
Netflix further stated that it may forgo another 2 million subscribers in the next quarter! The platform stated that over 100 million households are accessing Netflix via shared accounts, which is making the company’s growth harder in many markets.
Thus, it intends to crack down on this practice by charging those freebies too. The platform already started testing an additional payment to those household users, which may be expanded soon to more regions. Future, introducing an ad-tier with cheaper price.
Although the CEO of Netflix, Reed Hastings is opposed to this idea initially, he says to be a big fan of consumer choice too, so “allowing consumers who would like to have a lower price, and are advertising-tolerant, get what they want, makes a lot of sense.”
News of Netflix losing 200,000 subscribers triggered investors to sell the company’s stock, which dipped over 26% after the bell on Tuesday, washing off $40 billion of value. This run even triggered the rival platforms too, where Roku fell 6%, Walt Disney lost 5%, and Warner Bros Discovery was down by 3.5%.