Recall that last month the streaming service, Netflix disclosed that it has lost more than 35% of its value due to its loss of 200,000 subscribers in the first three months of the year and said it expects to lose 2 million more over the next quarter.
The decline brought Netflix’s subscriber base to 221.6 million, down from 221.8 million in the prior quarter. Just recently the company has laid off approximately 150 primary U.S based staff.
In a mailed statement, a representative of the streaming company wrote “As we explained on earnings, our slowing revenue growth means we are also having to slow our cost growth as a company. So sadly, we are letting around 150 employees go today, mostly U.S based. These changes are primarily driven by business needs rather than individual performance, which makes them especially tough as none of us want to say goodbye to such great colleagues. We are working hard to support them through this very difficult transition”.
Also, the streaming service editorial arm Tudum, saw Netflix lay off a contingent of its editorial staff. Over ten (10) writers that worked for the editorial team tweeted that they were laid off by the streaming service, including the editorial manager.
In a bid to increase its revenue, Netflix has tried to increase prices and also testing new features which they believe will help them generate more revenue. No doubt the streaming service is facing intense competition from the likes of Disney, HBO Max grows, Warner bros, and the likes which have seen them struggle to keep up.
The company has been hell-bent on looking for possible solutions to increase its revenue by cracking down on password sharing and also announcing a cheaper-ad supported tier in hopes of gaining new subscribers. It must be a tough time for the streaming service, in trying to keep its head above water.
The question which is likely on everyone’s lips is, what could have gone wrong for Netflix? Well, a rundown of what could have possibly gone wrong for Netflix. The company has for long been the only streaming service in the market that saw it gain a lot of subscribers, not until other streaming services such as Disney, Warner Bros discovery, and Paramount entered the streaming service market with deeper content libraries, which saw a reduction in the number of subscribers for Netflix due to the strong competition.
Also, another thing I feel caused Netflix revenue to dwindle is the aspect of password sharing. The streaming platform has estimated that a massive 30 million users in the United States and Canada alone are using Netflix by using someone else’s subscription. Also, more than 100 million (10 core) users overall are sharing their passwords with their loved ones which have directly affected the company’s revenue.
Such a feature should be changed with immediate effect, because It has reduced its revenue, as it has attracted more subscribers who are on the platform enjoying the services, without paying a dime, which poses a very challenge to the revenue. Although the company has disclosed that it allowed password sharing to increase the platform’s participation and get more people hooked.
In a bid to generate money from password sharing, the streaming service has rolled out a new option, with an increased subscription fee that allows users to add someone to their plan for $2 a month. The company has also warned that users should not share their passwords with people they don’t live with.
The streaming service also disclosed that the Russia-Ukraine war-affected its revenue due to its decision to withdraw its services from Russia resulting in a loss of 700,000 subscribers. This is not the end for Netflix, all they need to do is to meet not just the demands of their subscribers but also perception, as well as roll out more features with deeper content like its competitors.
