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Current Affairs

Loss of Netflix subscribers

Date: 25 April 2022 Tags: Miscellaneous

Issue

Streaming platform Netflix has witnessed a loss of some 2,00,000 subscribers in the first quarter of this calendar year.

 

Background

This is for the first time in more than a decade that such amount of subscribers have departed from the platform.

         

Details

  • Netflix has blamed geopolitical tensions, rising inflation, fierce competition, and some Covid-related disruptions for the loss.

  • Previously, Netflix had forecasted that it will add 2.5 million subscribers during the period. The situation is completely opposite now.

  • The loss resulted in a massive 26 per cent fall in stock price, erasing $40 billion from its stock market value.

  •  A further loss of 2 million subscribers in the coming quarter has been predicted by the company.

 

Reasons for loss of subscribers

  • The suspension of services in Russia due to its role in Ukraine war has resulted in a loss of 7,00,000 subscribers.

  • Severe competition from other streaming services and even traditional television was also a reason behind its sluggish growth in the quarter.

 

Way forward for Netflix

  • Till now, Netflix employed ad-free subscription model for its users. The company is now planning to introduce low price ad-supported model.

  • This method has been experimented by some of the rivals such as HBO Max and Disney+ for different regions.

  • The company is trying different ways to monetise the millions of households sharing Netflix accounts.

 

Expansion plans in India

  • The company is witnessing sustained growth in the Asia Pacific region in a variety of markets including India.

  • To attract new subscribers in India, Netflix had cut subscription prices for all its plans, making it competitive.

  • Currently, Netflix offers the cheapest mobile only plan now starting from Rs 149 per month instead of the earlier Rs 199 per month.