April 20, 2022
They are in no-(wo)man’s land.Aptus Capital Advisors analyst David Wagner on the challenges Netflix is facing. The streaming service announced they experienced an overall loss of subscribers in the first three months of 2022 — something they have not experienced in over 10 years.
- In a news conference this week, Netflix CEO Reed Hastings announced changes coming to the company after significant subscriber losses and a plunge in shares in response. ”Those are over 100 million households already are choosing to view Netflix” for free by using someone else’s account, he said. “We’ve just got to get paid at some degree for them.”
- The streaming company will begin minimizing password sharing and will create a subscription option supported by advertising. The new changes will first be tested in Chile, Costa Rica, and Peru.
- Something to consider: Inflation recently hit its highest rate since 1981. In a survey conducted in mid-March, 36% of participants reported that if prices continue to put pressure on their living expenses, they would choose to cancel a monthly subscription.
- Why It Matters: Netflix experienced a surge of new subscribers at the beginning of the pandemic. But because of competitors, rising prices, and the withdrawal of the service in Russia, the popular streaming service is navigating how to gain more viewers while retaining its 221.6 million current subscribers.
by Jenna Lee,