He wrote: “The woke mind virus is making Netflix unwatchable.”
So, what's really going wrong at Netflix?
Netflix stock (NFLX) is down more than $100 per share
On Tuesday, Netflix stock closed at $348.42 per share. The following day, it plummeted by $100 – the lowest since 2018. It declined by a further $25, closing at $226.19 on Wednesday.
This comes after the company revealed it had lost 200,000 global subscribers in the year's first quarter.
The platform lost more than 200,000 subscribers
Netflix experienced its first drop in paid subscribers in ten years – all 200,000 of them.
The bad news doesn't stop there. It is expected to lose a further two million subscribers by next month.
In its letter to shareholders, the streaming service put this down to four factors:
They can't control everything - They penned that it's becoming “increasingly clear that the pace of growth into our underlying addressable market (broadband homes) is partly dependent on factors we don’t directly control, like the uptake of connected TVs (since the majority of our viewing is on TVs), the adoption of on-demand entertainment, and data costs.”
Password sharing - It is estimated that approximately 30 million households in the US and Canada (UCAN) are not monetised because of account sharing. “We find it interesting that Netflix never disclosed the UCAN data point earlier,” media analysts at MoffettNathanson noted in a Wednesday report. “When asked in the past if UCAN was mature, the company would usually point to the 100 million peak U.S. TV homes as their ultimate U.S. TAM (total addressable market) and say that they had a long way to go. Turns out, they might have been at that 100 million TAM all along with nowhere left to go.”
Competition - Netflix admitted the inevitable: increased competition from other media streamers such as HBO Max, Apple TV+, Discovery+, Paramount+ and Peacock. Media analysts don't quite buy it, though.“The acknowledgement that competition has increased in the U.S. streaming video industry and might be impacting growth was also pretty obvious, yet denied by the company for a while,” the analysts wrote. “We question how easy that would be in a world where everyone wants to take share in the market by spending more on content!”
Russia’s invasion of Ukraine, and increased inflation - Suspending their platform in Russia resulted in the loss of 700,000 subscribers in the first quarter. Despite gaining 500,000 back, it still left Netflix with a 200,000 deficit. Netflix informed shareholders: “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.”
Plans to introduce adverts met with backlash
Netflix viewers turn to the platform for quick, accessible and entertaining content – with no ads.
However, this can soon change with co-CEO Reed Hastings considering implementing adverts. Hastings said they were looking at using adverts in the “next year or two" during an earnings call. Hastings said this would make room for lower subscription costs.
“Those who have followed Netflix know that I have been against the complexity of advertising and a big fan of the simplicity of subscription,” Hastings said during the call.
“But as much as I am a fan of that, I am a bigger fan of consumer choice. And allowing consumers who would like to have a lower price, and are advertising-tolerant, get what they want, makes a lot of sense.”
One baffled user quizzed: “Um when was anyone gonna tell me you can’t screenshot Netflix? And why?”
Journalist Anne V Clark also added: “Netflix has finally done it: they’ve blocked us from being able to take screenshots of their shows, because they are apparently sick of people watching and talking about their shows in an organic way. Noted!”
However, the platform isn't to blame for the inconvenience. Many browsers contain a Digital Rights Management (DRM) to restrict capturing
The streaming giant, however, does not block screenshots. Many web browsers have what is called a Digital Rights Management (DRM), which restricts people capturing movies or TV shows.
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