Netflix already raised prices earlier this year, and any additional costs could alienate its base, which is already strapped for cash because of the economy and a surplus of streaming options. “While we won’t be able to monetize all of it right now, we believe it’s a large short- to mid-term opportunity,” the company said Tuesday.īut making customers pay for the privilege of sharing their passwords could actually have a “negative impact” for the company, according to Nathanson. And last month Netflix said that over the last year, it’s been working on ways to “enable members who share outside their household to do so easily and securely, while also paying a bit more.” The company alluded to that Tuesday, saying it will focus more on “how best to monetize sharing” in terms of passwords. “Everyone’s spending more.”Īnother way Netflix could boost revenue: clamping down on password sharing. “Spending more doesn’t equal hits,” Nathanson said. Netflix loses $45 billion in value as subscriber numbers drop Doane Gregory/Netflix © 2022 Doane Gregory/Netflix The Adam Project (L to R) Ryan Reynolds as Big Adam and Walker Scobell as Young Adam. If making great content was easy, everyone would be doing it. That’s the value proposition they need to return to.”īut it’s not as easy as flipping a switch, no matter how many billions Netflix spends on courting big talent and funding spectacular productions. “Netflix just has to remember what made it so special was that it had the type of content and volume of content you couldn’t get anywhere else. “I think it comes down - as it often does - to content,” Shaikh told CNN Business. Zak Shaikh, vice president of programming at research-based media firm Magid, believes Netflix needs to answer two questions to change its current narrative: “How do they turn the ship around and start increasing subs again, and how do they generate more revenue per sub?” But even without that, the company still would’ve missed its own expectations by nearly 2 million. Pulling out of Russia alone cost the company 700,000 subscribers, Netflix said. In its letter to investors Tuesday, Netflix also pointed fingers at “macro factors” that are affecting many companies right now, such as “sluggish economic growth, increasing inflation, geopolitical events such as Russia’s invasion of Ukraine and some continued disruption from Covid.” The company blames many factors for its subscriber exodus, including competition and widespread password sharing. Now, 200,000 out of 221 million global subscriptions may seem like little more than a rounding error, but consider that the service was expected to add 2.5 million new users in the first three months of the year - a low bar that had already spooked investors in January.Īs if that wasn’t bad enough, Netflix said it expects to lose another 2 million in the current quarter. Netflix said Tuesday that it lost 200,000 subscribers in the first quarter of 2022. (NFLX) - once the untouchable king of streaming - has gone from “what’s next?” to “what now?” “What worked until this point may not be working anymore,” Michael Nathanson, a media analyst at MoffettNathanson, told CNN Business. And they’re wondering what the future of the company - and all of streaming - might look like. Once bullish experts and analysts who viewed Netflix as the linchpin of a transforming entertainment industry are now concerned about its growth going forward. Simply put, Netflix’s terrible 2022 has now become disastrous. And this was after the company’s stock had dropped more than 40% year to date. The news shocked Wall Street and sent shares plummeting 35% Wednesday morning, wiping out $50 billion in market cap. The company reported Tuesday that it lost subscribers for the first time in more than a decade. Call Eleven and Sheriff Hopper of “Stranger Things,” because Netflix’s world has been turned upside down.
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