The streaming service giant, Netflix listed the problems of inflation, the Ukrainian war, sanctions in Russia and increased competition as key factors to the decline in the number of consumer subscriptions for the first time in more than a decade.
Most recently, Netflix saw its shares fall 26%, further eroding US $ 40 billion of its stock market value.
This is not a surprise because last January, Netflix reported weak subscription growth until it lost half of its value.
The latest report states that Netflix has lost as many as 200,000 user subscriptions in the first quarter of 2022, while it predicts that quarter’s subscriptions will increase by 2.5 million.
Currently Netflix is said to have 221.6 million subscribers who subscribe to its service.
While the company’s revenue for the quarter rose 10% to $ 7.87 billion, it was still below Wall Street’s forecast.
Because of this, Netflix CEO Reed Hastings did not rule out the possibility that the company would offer a cheaper version of the service with advertising support.
Clearly Hastings, he dislikes advertising and prefers the simplicity of subscriptions, however, it is clear that the support of advertising services helps Disney and HBO, so this does not rule out the idea of advertising for his services.
It’s clear that the era of Netflix’s downfall is fast approaching, with the end of travel restrictions orders across almost the entire country, people are no longer tied up at home.
In addition, the sluggish economic growth rate from the impact of Covid-19 also added to the open wounds, with the average user of the streaming service choosing to create a shared account rather than open a new account.
One more thing, increased competition from other giants such as Amazon.com, Walt Disney and Warner Bros. Discovery as well as Apple Inc which started offering movie streaming also added to the pressure.
This does not take into account micro factors such as other video streaming applications such as TikTok and YouTube which are more popular with young users nowadays.
Not to forget also the Ukrainian war that separated Russia and other countries has stifled the growth of companies that have already begun to be subject to sanctions by Moscow regulators.
