Netflix has announced its wish to part ways with 300 of its employees at once, is this the beginning of the end?
Despite the return of Stranger Things, Netflix’s hit series, the company is sinking deeper and deeper into turmoil. The streaming leader announced that it had lost 200,000 subscribers at the start of 2022. A first, after 10 years of growth, which led to a drop in its stock market value as well as a legal action by its shareholders.
In the process, the American giant separated from 200 of its employees. A poaching far from sufficient, since the spokesperson for Netflix announces having to separate again from 300 employees.
So is this the beginning of the end for the “N”?
Despite ever-increasing investments, subscribers are jumping ship
The takeover of the special effects studio Scanline VFX at the end of 2021 and that of the video game studio Boss Fight Entertainment at the beginning of 2022, does not seem to revive Netflix’s growth.
In the first quarter of 2022, the American giant presented an increase in its turnover of only +9.8% over one year, to 7.87 billion dollars. Results which are mainly explained by an increase in its prices, but which remain very far from the +19% of the previous year.
Indeed, at the same time the company announced that it had lost 200,000 international subscribers. And this is just the beginning, since in a letter to its investors, the streaming service envisages a loss of 2 million additional subscribers by the end of the second quarter of 2022.
Increasingly fierce competition
Despite its leading position in SVoD and its 221.6 million subscribers, Netflix must definitely put an end to its monopoly. Today, the company faces increasingly innovative competition.
Indeed, Disney+ has acquired 130 million subscribers in less than three years, based on its diverse universe. For its part, Amazon Prime Video exceeds 150 million subscribers and is surfing on original creations, such as the Lord of the Rings series scheduled for next September.
An upcoming account sharing restriction?
But for the Los Gatos company, it’s not the competition, nor the lack of renewal of its content that is wrong. This rout is mainly due to account sharing.
The American giant explains that 100 million households have access to its services without going through a subscription. This would ruin its growth objectives, just like the sanctions imposed on Russia, following the invasion of Ukraine, which caused it to lose 700,000 subscriptions.
In addition to the advertising that should arrive soon on the platform, Netflix is therefore considering a way to charge its users for account sharing. From now on, all the solutions are good to limit the breakage.
Source : Engadget.com
31