Netflix Loses Subscribers For First Time In A Decade
The decline came after the firm suspended its service in Russia, resulting in a loss of 7,000 subscribers
Netflix customer base fell by 200,000 subscribers in the first three months of the year, according to its quarterly earnings report released on April 19. It is first time in a decade that the streaming television service witnessed drop in subscriber number, causing its share to plunge 25 per cent in extended trading. The decline came after the firm suspended its service in Russia, resulted in a loss of 7,000 subscribers.
“Our relatively high household penetration — including the large number of household sharing accounts — combined with competition, is creating revenue growth headwinds,” the company said in a letter to shareholders.
Benchmark analyst Matthew Harrigan had already said that the uncertain global economy is apt to emerge as an albatross for member growth and Netflix continue raising the subscription prices as the competition intensifies.
Netflix plans to introduce low-cost advertising-supported plans to regain the loss. “Those who have followed Netflix know that I have been against the complexity of advertising and a big fan of the simplicity of subscription. But I am an even bigger fan of consumer choice and allowing consumers, who are advertising-tolerant, get what they want makes a lot of sense,” said Reed Hastings, co-CEO, Netflix, in a statement.
According to reports, Netflix’s first quarter revenue is $7.87 billion and it ended March with 221.6 million subscribers. It reported per-share net earnings of $3.53, beating the Wall Street consensus of $2.89.
Streaming platforms are not the only choice of people nowadays. According to the latest digital media survey from Deloitte, the people from 14 to 25 years old, spend more time in games than watching movies or series at home.