Netflix had projected an increase of 2.5 million subscribers for the first quarter of 2022, but it reported a loss of 200,000 subscribers in the January-March quarter. The war in Ukraine and fierce competition contributed to a loss of subscribers for the first time in more than a decade and predicted deeper losses ahead.
The company has decided to launch an ad-supported, cheaper subscription plan following a slowdown in subscriber growth. The company attributed slow growth to a few factors, including multiple users sharing a single account. In addition to the 222 million paying households, Netflix is being shared with over 100 million additional households.
“Those who have followed Netflix know that I have been against the complexity of advertising and a big fan of the simplicity of subscription. But I’m a bigger fan of consumer choice, and allowing consumers who would like to have a lower price and are advertising-tolerant to get what they want makes more sense. So we are looking at that over a year or two. But we will be offering even lower prices with advertising as a consumer choice,” said Netflix CEO Reed Hastings.
In India, Netflix has a rather slow growth trajectory. In December 2021, Netflix dropped the price of its subscription plans to lure more subscribers to its platform. In markets like India, the streaming service loses revenue on account of multiple users sharing a single account.