Netflix may have benefited from the COVID-19 pandemic, but it doesn’t blame its latest troubles on people leaving their homes. Companies have disclosure that it lost about 200,000 subscribers in the first quarter of 2022, a stark contrast to the millions adding each quarter over the past year. However, the streaming giant says that the pandemic has only “blurred the picture” – there are a lot of problems lurking under the surface.
The company points out that competition is stiffer from streaming services like Disney+ and Prime Video. While Netflix is still gaining modest market share, Netflix wants to grow “faster”. The company also blamed limited expansion in many countries on both technological factors beyond its control (such as smart TV usage and data prices) and the abundance of of the Share account. Netflix says there are more than 222 million paying households, but more than 100 million others are sharing those accounts.
Decision service suspension in Russia also helped take Netflix from growth to loss. It would have added 500,000 customers, but ended up losing 700,000 after taking down the Russian base in response to the invasion of Ukraine. However, growth remained “soft” in all regions.
Netflix has outlined several attempts to turn the tide. They hope to improve the quality of their shows, profit from sharing (such as a paid sharing option in Latin America), and produce more content to suit an external audience. outside the United States, where growth was stronger.
These results may not be successful in the short term. Netflix still expects slight growth (no more than 1.5 million new members) or losses (up to 2 million) in the ongoing second quarter. With that said, Netflix clearly has no illusions that mobile games and small feature addition will be enough to spark renewed interest on their own – its fundamentals need to improve if it’s going to stand up to rivals.
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