Chronic. Netflix executives warned three months ago that the online video platform’s growth would run out of steam in the first quarter of 2022 for the first time since 2011. The last six months of 2021 had, however, been marked by real fireworks. With stratospheric investments (17.6 billion euros in 2021), the Californian giant had produced and distributed Squid Game, the most watched series in history, and two films, Red Notice and Don’t Look Up, which drew 150 million viewers each. As for its production The Crown on the British royal family, she received seven statuettes at the Los Angeles Emmy Awards in September.
Back in the atmosphere. Netflix announced on Tuesday, April 19, the loss of 200,000 subscribers in the first three months of the year when it expected to gain 2.5 million, a modest loss compared to its 221.6 million customers. worldwide. It is explained by the suspension of its activity in Russia since March, but also by the end of the two years of confinement and travel restrictions, which had boosted subscriptions. More worryingly, Netflix expects 2 million additional defections by the end of June.
Advertising breaks
And the Stock Exchange does not appreciate at all. The stock plunged 25% in trading following the close of Wall Street on Tuesday, and 42% since the start of the year. Platform co-founder Reed Hastings knows he needs to move fast to, he says, “back in the good graces of investors”. The increase in the price of subscriptions has its limits. He also plans to put an end to a certain laxity in the face of the illicit sharing of identifiers, which allows more than 100 million people to watch his series for free, by making “pay a little more” to maintain this right to share.
The Los Gatos group will above all have to evolve its model in the face of the saturation of the North American and European markets, and the merciless competition from Disney+, Amazon Prime Video, Apple TV or HBO Max. ” I am a gbig fan of expanding consumer choice”, explains Mr. Hastings in his letter to shareholders: within the next year or two, advertising breaks will be introduced within the framework of cheaper subscriptions. Netflix has also started to expand its offer to video games. Sport is another axis of diversification. And it must continue its investments, but in a more measured way, in the production of content. Netflix may prance in the lead in streaming, but it doesn’t have the deep pockets of Amazon or Apple, which can stream at a loss. And smother it slowly.