Why is Netflix losing subscribers?

Gravitas: Why is Netflix losing subscribers?
Netflix is all set to publish its earnings report for the second quarter of 2022. The results could determine the company’s future at a time when it is losing share value and subscribers. Palki Sharma decodes Netflix’s 2022 nightmare.

Do you know who would love the drama in
sri lanka netflix it’s right down the
rally high voltage politics compelling
images and a big bad villain netflix
could certainly make a thriller out of
it just one problem though they may not
have the money for it let me show you
some numbers netflix shares are down 70
this year they’ve fired more than 500
employees in the first quarter of 2022
they lost 200 000 subscribers two lag
now this is very important in 10 years
netflix has never lost subscribers in
any quarter ever
but in 2022 they did and chances are
things could get worse on tuesday
netflix will publish its earnings report
think of it as a report card it tells
you how much money they made how much
they spent and how many subscribers they
got or in this case maybe lost
this earnings report
is crucial for the company they’re
expecting a revenue bump of 9.7 percent
if that target is not met the shares
could crumble
wall street could lose interest in
netflix the question is why just look
around you almost everybody uses netflix
they have the best shows the best
interface and not to mention the best
brand image
so why exactly is netflix
underperforming for a number of reasons
one is that the market is saturated when
streaming blew up netflix had a monopoly
they stood alone in this new market
that’s not the case anymore now the
market has many other options disney has
its own streaming platform so does hbo
warner brothers amazon so the customer
has more options to choose from and this
competition is eating into netflix’s
revenue for example disney buffs won’t
buy netflix anymore they buy disney plus
reason number two is the price
difference a netflix subscription is a
lot more expensive than the other
is it worth it perhaps
but is it an absolute necessity no it’s
not especially when there’s a global
cost of living crisis so many households
are cancelling their streaming
in fact i’ve got data from the united
kingdom in the last quarter 1.66 million
subscriptions were cancelled 1.66
million the reason higher cost of living
if you have to choose between food fuel
and netflix what would you choose
exactly the data also found that younger
people are more likely to cancel
subscriptions the under 24 age group
in britain they’re shifting to free
services like youtube and tick tock
reason number three password sharing a
lot of people piggyback on their friends
netflix account
basically they share the same account
imagine this happening on a global scale
think about how many subscriptions
netflix is losing
and finally reason number four lack of
creative content
netflix is dragging out their classic
squeezing every bit of mileage from
their flagships
but that squeeze has a cost a lot of
viewers are losing interest instead
they’re exploring new streaming
so that explains why netflix is tanking
do they have a plan to tackle this the
company is betting on advertisements now
you may have noticed this on your
netflix account there are zero ads
it’s great for the customer not so much
for the company’s bottom line so netflix
is exploring an ad subscription model
with microsoft
now that’s part one of the plan another
part is to tackle uh to crack down
rather on password sharing to try to
force users to buy separate
subscriptions the question is will it
work well netflix does have an advantage
and that’s brand value the red n
is a highly marketable commodity
it is also the streaming leader with 221
million subscribers so netflix does have
the ingredients for a rebound a good
base a marketable brand and a workable
business plan what it cannot control is
outside factors like the economic
outlook recessions are not the best time
to netflix and chill the same goes for
consumer behavior during the pandemic
people had no option but to stay at home
and stream
but now they can go out for movies
so naturally the market had to collapse
having said that it’s not game over yet
every industry has faced similar
situations in their growth story every
company has faced a slump
but this story is important because how
netflix weathers this period will be key
to their growth in fact it could
determine the future of online streaming
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