Netflix might be the big power player in the streaming wars, but they’re suffering some serious setbacks. A recent quarterly statement revealed a loss of 200,000 subscribers and a stock drop of 35%. Ouch! And while there are a dozens of thinkpieces out there right now, along with plenty of folks gloating about this on Twitter, Netflix is making a move that their streaming rivals have mostly already taken.
During a Q1 interview recently, Netflix co-CEO Reed Hastings revealed plans for lower cost, ad-supported packages as a “consumer option” for those who don’t want the newly-hiked higher price point.
“Those that have followed Netflix know that I’ve been against the complexity of advertising and a big fan of the simplicity of subscription”, Hastings said. “But as much as I’m a fan of that, I’m 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.”
The drop in subscribers does coincide with Netflix shutting down service to Russia, out of protest for their assault on Ukraine. There have also been rumblings that Netflix will finally do something about password sharing. That solution could be more than a year off, but when it comes expect that to have a big impact, as well.
Of course, the biggest issue for Netflix is increased competition. Apple TV+, Disney+, HBO Max, andd others have taken a bite out of the streaming landscape. It’s not going to be enough for Netflix to throw a lot of money around on potential blockbusters. There’s no reason for them to be spending hundreds of millions of dollars for films that won’t bring in a fraction of that. Let the studios play that gamble.
