As the latest member of the FAANG tech group to mark an unprecedented reversal in its monolithic success, Netflix has reportedly lost subscribers in an unprecedented rout that could force some change.
Reuters reports a loss of 200,000 subscribers against prior estimated projected gains of 2.5 million accounts.
“Netflix offered a gloomy prediction for the spring quarter, forecasting it would lose 2 million subscribers, despite the return of such hotly anticipated series as ‘Stranger Things’ and ‘Ozark’ and the debut of the film ‘The Grey Man,’ starring Chris Evans and Ryan Gosling,” write Dawn Chmielewski and Tiyashi Datta. “Wall Street targeted 227 million for the second quarter, according to Refinitiv data.”
Suspension of service to Russia, the duo wrote, led to around 700,000 fewer subscribers for the platform.
Netflix stock is down 26%.
Leaders are thinking about adding advertising in order to try to fix the downturn.
“Those who have followed Netflix know that I have been against the complexity of advertising, and a big fan of the simplicity of subscription,” said Netflix CEO Reed Hastings in response to the problem. “But as much as I am a fan of that, I am a bigger fan of consumer choice. And allowing consumers who would like to have a lower price, and are advertising-tolerant, get what they want makes a lot of sense.”
However, this may end up having the reverse effect.
“Hey @netflix, I’ve been a member since 2006 but if you add commercials I’m gone,” subscriber Michael Donohue tweets, as quoted in a Newsweek piece covering the news. “It’s really that simple. I left cable for your service because of ads.”
About a month ago, Facebook reported its first losing quarter in terms of active users. Since then, that snafu has been fairly quiet. Will Netflix be able to turn the tide? Stay tuned.