Netflix is losing subscribers and is considering turning to ad

A ten-year tradition was broken yesterday by Netflix, with the streaming service admitting that it is becoming more difficult in many markets to increase its subscribers, with the result that its shares fell by 25% in post-conference transactions.

Netflix announced that it lost 200,000 subscribers in the first quarter of the year. This is the first decrease in subscribers in a decade, and it seems that he predicts that he will continue to “curse” as he estimates that this number will “climb” to 2 million this quarter, he estimated, which shocked investors, who were expecting increase of 2.6 million subscribers.

Netflix has nearly 222 million customers worldwide. However, subscriber growth has stalled and revenue in the last quarter, up 9.8% to $ 7.87 billion, is below Wall Street forecasts. Netflix also estimates that there are more than 100 million people who view the service without paying for it.

The results announced by Netflix mark a significant change as the company has grown rapidly over the last 10 years and benefited significantly during the coronavirus pandemic. As it began to show the first signs of slowing down late last year, company officials attributed it to the “noise” from the prolonged effects of the Covid crisis.

However, according to the streaming service, the dramatic slowdown is due in part to saturation in its largest markets, but it also acknowledged the impact of intensifying competition. Together, these factors had created “reverse winds in revenue growth,” the company said.

Are there any ads?

Following the announcement of the results, Netflix is ​​considering creating a lower priced version of the service that will have ads.

The ad was hinted at by Netflix co-founder Reed Hastings, who talked about the possibilities of advertising, speaking to investors on Tuesday.

“Those who follow Netflix know that I was against the complexity of advertising and I am a big fan of the simplicity of the subscription,” Hastings said. “I’m more a fan of consumer choices and allowing consumers who would like a lower price and are tolerant of advertising to get what they want is very logical,” he said, adding that the company would look into the next two years. create an ad-supported version of the service.