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Netflix to offer cheaper ad-supported plans due to its major loss.

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According to Netflix , it lost 200,000 subscribers in the first quarter, falling far short of its target of 2.5 million new subscribers. Suspending service in Russia after the Ukraine invasion took a toll, resulting in the loss of 700,000 members.

The lagging subscriber growth is prompting Netflix to contemplate offering a lower-priced version of the service with advertising, citing the success of similar offerings from rivals HBO Max and Disney+.

“Those who have followed Netflix know that I’ve been against the complexity of advertising, and a big fan of the simplicity of subscription,” said Netflix CEO Reed Hastings. “But, as much as I’m a fan of that, I’m a bigger fan of consumer choice.”

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Despite the return of such highly awaited programs as “Stranger Things” and “Ozark,” as well as the release of the film “The Grey Man,” starring Chris Evans and Ryan Gosling, Netflix forecasted a 2 million membership loss in the spring quarter. According to Refinitiv statistics, Wall Street expected 227 million in the second quarter.

Other video streaming-related stocks were hit hard by the downturn, with Roku ROKU.O down nearly 6%, Walt Disney DIS.N down 5%, and Warner Bros Discovery WBD.O down 3.5 %.

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Hastings told investors that the pandemic had “generated a lot of noise,” making it harder to analyze the company’s subscription business’s ups and downs during the last two years. It now appears that a combination of rivalry and the number of accounts sharing passwords is to blame, making it more difficult to expand.

“When we were growing fast, it wasn’t a high priority to work on,” Hastings said of account-sharing in remarks during Netflix’s investor video. “And now we’re working super hard on it.”

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Yvone Kendi
Yvone Kendi
Writer by heart. Lover of life and technology. Helping you with simple life hacks using technology. Contact me at [email protected]

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