After losing a chunk of its customers and a massive dip in stock prices for the first time in over a decade last month, Netflix’s stock is still down.
To change the narrative back in its favor, analysts have advocated introducing advertisements and cutting down on password sharing. Netflix could save itself by forming cooperation with a sector with which it was previously at odds: movie theaters.
Despite the fact that Netflix has distributed and even purchased a few films in theaters, the majority of its theater releases have been intentionally limited. It may be time for both sides to join forces now that the streamer is healing and theaters are slowly rebounding from the epidemic. Although no specific date for implementation has been set, it has been made public. Meanwhile, to combat the depleting stock, the streaming platform promises to introduce lower pricing and ad support.
Netflix CEO Reed Hastings stunned the media and advertising world in April when he announced that the firm was open to bringing commercials to the service in response to a decline in the stock. For years, Hastings has refused to accept advertisements on its site.
Those who have followed Netflix know that I am a great supporter of subscription simplicity and am opposed to complexity in advertising.” However, I am a great believer in consumer choice, as much as I support it. ” In a post-earnings call last month, Hastings mentioned this. It’s also logical to allow customers who choose a lower price and are willing to endure advertising to receive what they want. ”
In April, Netflix CEO Reed Hastings claimed the company was looking into ways to bring advertisements to the site “over the next year or two.” The process, though, appears to be speeding up. Netflix, which declined to comment for this piece, is seeking new ways to raise money, stop the bleeding on Wall Street, and change how its stock is perceived.
Investors, however, have been thrown into a state of worry following the news, and observers reported that the ripple effect of Hastings’ announcement led to a 1% drop in Netflix stocks.
Netflix is considering restricting password sharing among its customers as a potential revenue stream to compensate for declining stock and revenue. According to reports, Netflix told employees that the password project would start around the same time as the ad-tier debut.
The company said in March that it had spent a year working on ways to “allow members who share beyond their family to do so conveniently and safely while still paying a little more.”
In April, Netflix claimed to have 221 million users, making it the streaming market leader, but it lost 200,000 customers in the first quarter of 2022. As if that wasn’t awful enough, the company then stated that it expects to lose another $200,000.00 in the second quarter.
Investors are doubting Netflix’s and the streaming industry’s future development due to subscriber losses and low expectations.
