Netflix Blames Russian War On Ukraine And Account Sharing By Subscribers For Its Losses
Netflix blamed the suspension of its service in Russia and account sharing as reasons behind its losses in the first quarter of this year. The Silicon Valley tech firm is also facing tough competition from titans like Apple and Disney. The leading streaming television service is planning to take measures to strengthen its market share.
• Netflix reported a loss of subscribers in the first quarter of this year
• Its net income dropped from $1.7 billion in the last quarter to $1.6 billion this quarter
• Its shares also dropped by 25% to $262 in after-market trades
Why Is Netflix Facing Losses?
The prime reason Netflix sees behind the drop in subscribers is Russia’s invasion of Ukraine which led to the suspension of its services in Russia and the loss of subscribers.
The second reason it gives for slow subscribers is the slow speed of broadband Internet service and the slow growth of smart television. Also, subscribers sharing their accounts with others is also a reason behind its losses.
What Is The Present State Of Its Subscribers?
Netflix has nearly 222 million households as its subscribers but this number is slightly less than the subscribers it had in the first quarter of last year. But what worries it is that the subscribers are sharing their accounts with 100 million others that aren’t paying for the service.
The streaming services admitted that account sharing as a percentage of their paying membership hadn’t changed much over the years. Also, it was harder to grow membership in many markets.
Last year it tried to increase its membership by allowing the subscribers to pay slightly more to add other households. But the results achieved weren’t satisfactory. But there is little Netflix can do to prevent subscribers from sharing their accounts with others.
What Is Netflix Doing To Add Its Subscribers?
It said that their plan was to reaccelerate their viewing and revenue growth by continuing to improve all aspects of Netflix. It would improve the quality of their programming and recommendations. It said it was doubling down on content creation.