Streaming company Netflix, which enjoyed supremacy in the OTT market throughout the 2020 pandemic, is looking at a loss of over 25% in share value with 200,000 subscribers exiting the service. Netflix Inc said that rising costs due to inflation, the war in Ukraine with Russia, and fierce competition from rivals in the segment. Netflix saw its lowest subscriber growth from October-December 2021 reported in January this year, it added 8.3 million subscribers, which was its slowest growth since 2016.
From November to January, Netflix had lost almost 50% of its value due to the low growth of subscribers reported. At that time, the company had explained to shareholders that the inflated number of subscribers during the pandemic was a “Covid overhang” and growing economic hardships, especially in Latin America and also other parts of the world, had impacted its growth of new watchers.
Netflix had targeted an addition of 2.5 million subscribers in Q1 2022 but instead lost 200,000. Suspension of services in Russia as part of sanctions for ‘invading’ Ukraine cost the company 700,000 members. Other entertainment company stocks were also affected due to Netflix’s poor showing, with the shares of Roku falling by 6%, Walt Disney 5%, and Warner Bros. and Discovery down by 3.5%. Netflix presently has 221.6 million suscbribers and the last time it reported a fall in user base was in October 2011.
As measures to correct the situation, Netflix CEO Reed Hastings said that despite his personal preference for subscriptions over advertisements, “consumer choice” is superior and that advertising is working for rivals Disney and HBO. Netflix is considering offering a lower-charged subscription service that incorporates ads, and is also looking at ways to increase revenue from accounts that users share with friends and family.