Streaming platform Netflix on Tuesday said it lost two lakh subscribers during the January to March period, Reuters reported. The streaming giant added that it expects to lose another 20 lakh subscribers in the April to June period.
This is for the first time in the last 10 years that the streaming platform has lost subscribers, according to AFP.
The subscriber loss caused its shares to plunge 26%, erasing Rs 4,000 crore of the company’s stock market value on Tuesday, reported Reuters.
The company cited inflation, the ongoing war in Ukraine and increased competition as reasons behind the decline in the number of subscribers.
Netflix said that it lost 7,00,000 subscribers after it suspended its services in Russia for invading Ukraine.
“Streaming is winning over linear, as we predicted, and Netflix titles are very popular globally,” Netflix said in a note to investors, The Guardian reported. “However, our relatively high household penetration – when including the large number of households sharing accounts – combined with competition, is creating revenue growth headwinds.”
The company was referring to people sharing their Netflix logins with family and friends.
“Our plan is to reaccelerate our viewing and revenue growth by continuing to improve all aspects of Netflix – in particular, the quality of our programming and recommendations, which is what our members value most,” Netflix said in a statement, reported The Guardian.
After the setback, Netflix is now contemplating to reduce the price of its services with advertisements.
“Those who have followed Netflix know that I’ve been against the complexity of advertising, and a big fan of the simplicity of subscription,” said Netflix co-Chief Executive Officer Reed Hastings, Reuters reported. “But, as much as I am a fan of that, I am a bigger fan of consumer choice.”
The decline in subscribers has caught Wall Street by surprise.
“They suffered from a combination of approaching saturation, inflation, higher pricing, the war in Ukraine and competition,” according to Michael Pachter, analyst at US investment bank Wedbush Securities. “I don’t think any of us expected that all to happen at once.”
At the end of March, Netflix had 221.6 million worldwide subscribers.