Recently Netflix lost 1 million subscribers And with that Netflix’s stock fell 65%. But do you know why it’s happening? Let’s find out.
The Russia – Ukraine War
The first question is why Netflix’s stock fell rapidly to 65%, well the main reason is the Russia-Ukraine war. As soon as Russia started the war with Ukraine, Netflix shut down all its services in Russia which has one of the biggest customer bases for Netflix. This decision had a very negative effect on their stocks. Netflix reportedly lost almost 700,000 subscribers after stepping back from Russia.
Lack of Indian content
Indians have been one of the biggest consumers of OTT in the past few years. When Netflix was new in India it got popular for its Indian-based content like Sacred Games which was one the most successful web series in India. But recently Netflix has not produced any Indian-based content due to they have also lost Indian customers as well.
High competition and the Price difference
Even though Netflix gained a lot of subscribers due to Sacred Games but the customer base was still very low. One of its main reason is its pricing. Netflix was charging around 500 rupees per month for its basic plan at that time (which is now around 200 rupees) while Netflix’s biggest competition Prime Video offers its membership for 999 per year. Another competition of Netflix, Disney+ Hotstar charges rupees 500 per year for its membership.
Also, Prime Video and Hotstar produce more Indian-based content than Netflix and their pricing is also around 1/10th of Netflix. The reason behind such a huge pricing gap is the production quality of Netflix. Netflix produces some most popular web series that are watched around the globe like Money Heist and Stranger things which require a big amount of production cost.
Disney+ Hotstar has the biggest subscriber base of 5 crore subscribers in India. The second is Amazon Prime Video which has a subscriber base of 2.2 crore subscribers in India while Netflix has the least subscriber base of 50 lakh subscribers. Talking about the subscriber base all over the world, Netflix has a 22 crore subscriber base while Amazon Prime Video has a 20 crore subscriber base.
Netflix lost 1 million subscribers
If reports are to be believed, Netflix lost around 200,000 subscribers in the first quarter of 2022 and then lost around 1 million subscribers in the second quarter of 2022 which is the biggest subscribers loss in the company’s history. Another reason could be the no “one at a time” approach. Prime Video and Hotstar always release one episode in a week of their exclusive content which automatically forces the customer to stay subscribed to these apps for almost 8-9 weeks. While Netflix uploads all the episodes of their exclusive content at a single time. So the customer can watch the whole series of 8-9 episodes in just a week and then the customer just doesn’t need to stay subscribed to Netflix.
Changes coming in the Netflix app
Netflix reportedly will soon start to run ads in their app in India to reduce their subscription cost. The app can launch some plans at an affordable cost but you will be shown ads too just like youtube where in the free version you watch ads while watching any videos. Netflix is also working on its loophole where so many people share a single Netflix account. So there are possibilities that in the future if you want to share your account with more than 5+ people you will be asked for some extra fees.