Netflix reported losing over 200,000 subscribers for the first time in over a decade and expects to lose more in the coming months.
QUICK FACTS:
- The streaming service has reported that it expects to lose close to two million subscribers in the current quarter, according to National File.
- The sudden drop in subscribers led to a 25% decrease in Netflix’s stock price on Tuesday.
- While increased competition is believed to have been a major factor, the company believes price hikes and password sharing have been the main reason for the lessening subscriber count.
NETFLIX IN A LETTER TO SHAREHOLDERS:
“Streaming is winning over linear, as we predicted, and Netflix titles are very popular globally. However, our relatively high household penetration — when including the large number of households sharing accounts — combined with competition, is creating revenue growth headwinds.”
BACKGROUND:
- Netflix has reportedly discussed eliminating password sharing in order to make up for the loss in revenue, stating it would be a “big opportunity” to preserve their numbers.
- The company announced in March two new paid-sharing features that would give households the opportunity to pay for additional members.
- “As we work to monetize sharing, growth in ARM (average revenue per membership), revenue and viewing will become more important indicators of our success than membership growth,” Netflix said.
- Tesla CEO Elon Musk said on Tuesday that the “woke mind virus” is making Netflix “unwatchable,” just hours after the online video streaming giant’s stock plummeted following dismal quarterly earnings.
