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Netflix’s flurry of woke content, the end of Covid and Harry and Meghan’s ‘patronising virtue-signalling lectures’ on climate change and racism helped to drive 200,000 subscribers away, viewers revealed today as the US streaming giant’s shares tanked by an eyewatering 25%.
The Californian company’s decade of uninterrupted expansion came to a juddering halt and appeared to go into reverse after it revealed that it lost hundreds of thousands of subscribers in January-March this year, and could lose 2million more in April-June.
Netflix said the Covid boom had ‘created a lot of noise’ as it blamed its slowdown on the post-lockdown return to normality. It also blamed password sharing, competition from Disney+, Apple TV and Now TV, the cost-in-living crisis gripping the West, and its decision to ‘quit’ Russia – losing 700,000 customers in one swoop – because of Putin’s invasion of Ukraine.
However, current and former subscribers said they turned off from Netflix because they are seeing friends and family and enjoying the Spring weather instead of lying crumpled on the couch.
Others claimed ‘there’s nothing to watch’, seizing on billionaire Elon Musk’s taunt that ‘the woke mind virus is making Netflix unwatchable’ as the company releases show such as He’s Expecting, which depicts a man who becomes pregnant.
And some Netflix users said that the decision to sign up the Duke and Duchess of Sussex for $100million was the last straw, and preferred to cancel their accounts than listen to Harry and Meghan’s ‘patronising, virtue-signalling lectures’. They are filming a docu-series for Netflix on the Invictus Games, which they are currently attending in The Hague in Holland. But at the opening ceremony of the sporting contest, Meghan had another dig at the Royal Family by talking about ‘service’, while her husband Harry called on the world to ‘better show up’ for Ukraine before exclaiming: ‘Slava Ukraini!’.
One Netflix user wrote on Twitter: ‘Making Harry and Meghan program directors definitely didn’t help Netflix’, while another mused: ‘Netflix has been Markled. The curse of having Meghan Markle and Harry’. And a third said: ‘The majority of the public are not remotely interested in watching content like Harry & Meg’s patronising, virtue-signalling lectures on Netflix either, no wonder their prices have gone up! If Netflix don’t serve up better content, the subscription isn’t value for money’.
Another commented: ‘Nothing on Netflix seemed interesting enough to watch. We cancelled it recently to save money’.
And one former subscriber tweeted: ‘I’m one of those who recently cancelled Netflix, largely because it’s a massive time suck and there’s nothing really good to watch. Maybe produce decent content and people will hang around?’.
Founded in 1997 by Reed Hastings and Marc Randolph, Netflix enjoyed a decade of uninterrupted expansion when it began producing original content including The Crown, House of Cards, Orange is the New Black, Squid Game, Bridgerton and Sex Education. However, it has also produced ‘woke content’ such as He’s Expecting and My Octopus Teacher.
Upon news that it had shed 200,000 subscribers, Netflix shares plunged by 25%. So far this year, its shares are down about 40%, after markets jolted in January when it said that subscriber growth would slow significantly in 2022. If the stock drop extends into Wednesday’s regular trading session, Netflix shares will have lost more than half of their value so far this year – wiping out about $150billion (£115billion) in shareholder wealth in less than four months.
The company has now started testing different ways of curbing password sharing in Chile, Costa Rica and Peru – and could extend this elsewhere if it proves successful. Bosses are also considering turning the service into a low-fee subscription supported by ads.
Responding to the development, Elon Musk taunted in a tweet: ‘The woke mind virus is making Netflix unwatchable’
Upon news that it had shed 200,000 subscribers, its shares plunged by 25%. So far this year, its shares are down about 40%, after markets jolted in January when it said that subscriber growth would slow significantly in 2022
Netflix users said how they cancelled their accounts because they didn’t think there was anything good to watch
Harry and Meghan attend the Invictus Games opening ceremony at Zuiderpark on April 16, 2022 in The Hague, Netherlands
Other Netflix users bemoaned ‘woke’ content and said that they wouldn’t put up with Harry and Meghan’s ‘lectures’
Netflix CEO Reed Hastings during the See What’s Next event at Villa Miani in Rome, Italy, April 18, 2018
Netflix is losing billions of dollars a year because of illegal password-sharing ‘marketplaces’ that offer access for just $1, experts have claimed. The popular streaming app is missing out on up to $6.25billion annually as customers use the services to dodge the $19.99 a month premium account fee. But the firm last month launched its first major counteroffensive to password sharing by letting watchers add up to two other users for just $2 in some countries. Netflix is not the only website to be hit by the scams, with HBO Max and Disney+ subscriptions also being ripped off by dodgy so-called marketplaces
The history of Netflix price hikes in the UK
The Netflix logo is seen on a TV remote controller in this illustration photo taken January 20, 2022
May 2014: Netflix announced an increase in its monthly fee for streaming movies and television shows from £5.99 to £6.99.
The price hike was immediate for new subscribers but was delayed for two years for its existing members.
But Netflix allowed subscribers to keep paying £5.99 a month if they opt for a lower-resolution ‘SD’ quality service.
May 2016: Netflix raises its monthly price for UK basic users from £5.99 to £7.49 a month.
A similar price change took place for US customers, who saw their subscription fee increase by $2 (around £1.40 at the time).
Anyone who signed up to Netflix when it launched in Britain would have received the standard package for £5.99 per month.
But in an email to subscribers Netflix wrote: ‘When we raised prices for new Netflix members in 2014, we kept your price the same for two years. Your special pricing is now ending and your new price will be £7.49 per month.’
October 2017: The company raised prices in both the UK and US for the first time in two years. The standard package price increase by 50p to £7.99 per month. The premium package jumped to £9.99 a month, an increase of £1.
Netflix said at the time that the price change reflected the additional content added to its service.
May 2019: Netflix confirms that British customers will see the price of the standard tarriff increase from £7.99 to £8.99. The premium tarriff was also bumped up by £2 to £11.99.
January 2021: Netflix hikes subscription fees for UK users as the country entered its third lockdown amid the coronavirus pandemic.
The standard package – which allows two screens to access an account, as well as HD – was raised by £1 per month, from £8.99 to £9.99.
The premium package – providing four-screen access per account and Ultra HD – is bumped up by £2, from £11.99 to £13.99. The basic package stayed the same price.
March 2022: Netflix increases prices for the second time in just over a year.
The basic and standard plan go up by £1 a month to £6.99 and £10.99 respectively, while the premium tier goes from £13.99 to £15.99.
The company told shareholders on Tuesday: ‘Our revenue growth has slowed considerably. Streaming is winning over linear, as we predicted, and Netflix titles are very popular globally.
‘However, our relatively high household penetration – when including the large number of households sharing accounts – combined with competition, is creating revenue growth headwinds.’
Netflix was previously stung by a customer backlash in 2011 when it unveiled plans to begin charging for its then-nascent streaming service, which has previously been bundled for free with its traditional DVD-by-mail service before its international expansion.
In the months after that change, Netflix lost 800,000 subscribers, prompting a apology from Netflix CEO Reed Hastings for botching the execution of the spin-off.
Tuesday’s announcement was a sobering comedown for a company that was buoyed two years ago when millions of consumers corralled at home were desperately seeking diversions – a void Netflix was happy to fill. Netflix added 36million subscribers during 2020, by far the largest annual growth since its video streaming service’s debut in 2007.
But Hastings now believes those outsized gains may have blinded management. ‘Covid created a lot of noise on how to read the situation,’ he said in a video conference Tuesday.
Netflix began heading in a new direction last year when its service added video games at no additional charge in an attempt to give people another reason to subscribe.
Escalating inflation over the past year has also squeezed household budgets, leading more consumers to rein in their spending on discretionary items. Despite that pressure, Netflix recently raised its prices in the US, where it has its greatest household penetration – and where it’s had the most trouble finding more subscribers.
In the most recent quarter, Netflix lost 640,000 subscribers in the US and Canada, prompting management to point out that most of its future growth will come in international markets. Netflix ended March with 74.6million subscribers in the US and Canada.
The news deepens troubles that have been mounting for the streaming service since a surge of signups from a captive audience during the pandemic began to slow.
It marks the fourth time in the last five quarters that Netflix’s subscriber growth has fallen below the gains of the previous year.
Now investors fear that its streaming service may be mired in a malaise that has been magnified by stiffening competition from well-funded rivals such as Apple and Walt Disney.
Jefferies analyst Andrew Uerkwitz told the FT that the announcement was a ‘change in tone’ from Netflix, which he said rarely acknowledged that it faced competition in the past. He added: ‘It sounds like they’re in rebuilding mode.’
Paolo Pescatore, an analyst at PP Foresight, said the subscriber loss was a ‘reality check’ for the company, as it tries to balance retaining subscribers with raising its revenue.
‘While Netflix and other services were key in lockdown, users are now thinking twice about their purchasing behaviour based upon changing habits,’ he told the BBC.
Aptus Capital Advisors analyst David Wagner said it’s now clear that Netflix is grappling with an imposing challenge. ‘They are in no-(wo) man’s land,’ Wagner wrote in a research note Tuesday.
The Los Gatos, California, company estimated that about 100million households worldwide are watching its service for free by using the account of a friend or another family member, including 30million in the US and Canada.
Previously, Netflix bosses said password sharing was ‘something you have to learn to live with, because there’s so much legitimate password sharing, like you sharing with your spouse, with your kids… so there’s no bright line, and we’re doing fine as is’.
In its shareholder note, the company said: ‘Sharing likely helped fuel our growth by getting more people using and enjoying Netflix. And we’ve always tried to make sharing within a member’s household easy, with features like profiles and multiple streams.’
However, Netflix has indicated it will expand a trial program it has been running in three Latin American countries – Chile, Costa Rica and Peru – to prod more people to pay for their own accounts.
Netflix’s most expensive projects yet: From the blockbuster show The Crown to Ryan Reynolds flick Red Notice and hit series Stranger Things
This image released by Netflix shows a scene from the popular Korean series Squid Game
Simone Ashley as Kate Sharma and Jonathan Bailey as Anthony Bridgerton in Netflix series Bridgerton
Rupert Friend and Sienna Miller in new Netflix political drama Anatomy of a Scandal
In this photo illustration a computer screen and mobile phone display the Netflix logo on March 31, 2020 in Arlington
Netflix CEO Reed Hastings: Boston-born founder with Santa Cruz mansion, ‘Olympic-sized’ swimming pool and two private jets
Netflix CEO Reed Hastings in the Milken Institute Global Conference in Beverly Hills on October 18, 2021
Hastings was born in Boston, Massachusetts, attended Bowdoin College, and after considering serving in the armed forces as a Marine, joined the Peace Corps instead. He then got a masters in computer science from Stanford University in 1988.
Before Netflix, he founded Pure Software, a software troubleshooting company in 1991. He later left the company after an acquisition to start Netflix in 1997 with colleague Marc Randolph.
Netflix, which initially offered DVD rentals by mail, grew rapidly as the internet expanded and Hastings became the unchallenged boss when Randolph left in 1999. But it was when Netflix began producing its own content that the California-based company truly became a force to be reckoned with.
Hastings certainly enjoys the fruits of his labour, sharing his vast home with his wife of more than 30 years, Patty Ann Quillin, and their two adult children, musician Molly and Sean. Together, they lead a lifestyle that seems an unusual blend of high-tech luxury and pastoral charm.
It was previously reported that they own two private jets. The Santa Cruz mansion boasts an Olympic-sized swimming pool and a 12-person Jacuzzi. A home theatre – for Netflix binges, no doubt – has cutting edge Dolby Atmos surround sound, a system more advanced than most US cinemas.
And their vast garage can house 12 cars, while the driveway has space for a further 15.
Hastings said: ‘Those are over 100million households already are choosing to view Netflix. We’ve just got to get paid at some degree for them.’
In this locations, subscribers can extend service to another household for a discounted price. In Costa Rica, for instance, Netflix plan prices range from $9 to $15 a month, but subscribers can openly share their service with another household for $3.
Netflix offered no additional information about how a cheaper ad-supported service tier would work or how much it would cost. Another rival, Hulu, has long offered an ad-supported tier.
While Netflix clearly believes these changes will help it build upon its current 221.6million worldwide subscribers, the moves also risk alienating customers to the point they cancel the service.
However, Netflix is not the only streaming service finding that accounts are being cancelled, with new figures showing that more than 1.5million households in the UK alone left Disney+, Now and Apple TV+ during the first three months of the year.
While 58 per cent of households still retain at least one paid-for streaming service, the number that do so fell by 215,000 in the first quarter of this year.
‘With many streaming services having witnessed significant revenue growth during the height of Covid, this moment will be sobering,’ said Dominic Sunnebo, the global insight director at Kantar Worldpanel, the publisher of the Entertainment on Demand report.
‘The evidence from these findings suggests that British households are now proactively looking for ways to save, and the subscription video-on-demand (SVoD) market is already seeing the effects of this.’
The Kantar Worldpanel report found that 16.9 million UK households had at least one subscription service at the end of the first quarter.
While there were 1.29 million new subscriptions to SVoD services in the UK in the first three months, this was outweighed by 1.51 million cancellations.
Unsurprisingly, the world’s two most popular streaming platforms proved to have the lowest rate of customers leaving in the first quarter, with cost-conscious subscribers identifying Netflix and Amazon’s Prime Video as their ‘must-have’ services.
Kantar said that despite ‘churn’ rates – the rate at which customers cancelled subscriptions – increasing almost across all streaming platforms, there was a ‘clear difference’ in the number of subscriptions cancelled outside of Netflix and Amazon.
‘Netflix and Amazon can be seen to be hygiene subscriptions for Brits; the last to go when households are forced to prioritise spend,’ Kantar said.
‘Disney, Now TV, Discovery+ and BritBox all saw significant jumps in churn rates quarter-on-quarter.’
Prime Video’s thriller series, Reacher, and Netflix dramas Ozark and Inventing Anna proved to be the most popular shows on SVoD services in the UK in the first three months of 2022.
Kantar’s research, which was based on interviews with 14,500 people, found that cancellations of streaming subscriptions accelerated from 1.2 million a year ago and from 1.04 million during the final three months of 2021 to 1.5 million.
The first quarter of 2022 also saw the lowest ever rate of new subscribers, according to Kantar.
Amazon Prime Video led the way for new subscribers in Britain, taking a 27 per cent slice of the market, while Disney+ was second with 14 per cent and Now third on 9 per cent, just edging out Netflix and Apple TV+.
Is Netflix diversifying? Streaming giant is launching an Exploding Kittens mobile game as it ventures further into the gaming world
Netflix has announced that it is launching an Exploding Kittens mobile game and TV series at the same time
Netflix has announced that it is launching an Exploding Kittens mobile game and TV series, in a first-of-its-kind deal.
Exploding Kittens is a hugely popular card game that came out in 2015 and tasks players with tricking their friends into ‘blowing up’.
‘The co-development of a game and animated series breaks new ground for Netflix,’ said Mike Moon, Head of Adult Animation at Netflix. ‘And we couldn’t think of a better game to build a universe around than Exploding Kittens, one of the most inventive, iconic and original games of this century!’
The news comes shortly after Netflix announced that it was venturing into gaming, with the launch of five free mobile games for its subscribers.
Exploding Kittens – The Game will launch on Netflix in May, followed by an adult animated comedy series next year, starring Tom Ellis, Abraham Lim and Lucy Liu.
The mobile game – which can be played as a single player or with multiple players – will task players with drawing virtual cards, while trying to avoid Exploding Kitten cards. However, unlike the original card game, players will be able to access two new exclusive cards on the mobile game.
The Radar card will reveal to players the position of the Exploding Kitten card closest to the top of the deck, while Flip Flop will reverse the order of the cards in the deck.
Meanwhile, the animated series from showrunners Shane Kosakowski and Matthew Inman will feature God and the Devil being sent to Earth in the bodies of house cats.
‘Our goal is to offer our members great entertainment they’ll love in whatever format they may enjoy – whether it be a game or an animated series,’ said Leanne Loombe, Head of External Games at Netflix. ‘As we expand our mobile games catalog, we’re excited to partner with the Exploding Kittens digital team to bring this enjoyable game to all age groups, including a few exciting updates exclusively for our members.’
Source: Daily Mail