The year 2022 is off to a bad start for the TV channel Netflix, which specialises in series: in the first quarter of 2022, it has already lost more than 200,000 subscribers. This is the first time that a phenomenon of this magnitude has occurred in 10 years. In addition, the stock has fallen by almost 35%.
For Netflix, the explanation for this drop is to be found in the abusive practice of sharing logins and passwords with people who are not subscribers to the service. In a letter to its shareholders, Netflix awkwardly tries to look on the bright side, explaining that the sharing has at least had the advantage of making Netflix known to an ever-wider audience. Netflix owes part of its growth to this phenomenon:
This is a big opportunity, as these households are already watching Netflix and enjoying our service. 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. While these have been very popular, they’ve created confusion about when and how Netflix can be shared with other households.
The shortfall ends up being considerable: more than 30 million accounts are said to share their passwords in the U.S. and Canada.
The 200,000 subscriber drop is just the beginning according to the company, which expects to lose another 2 million subscribers in Q2. The decline affects all areas of operation, with the exception of the Asia-Pacific region. To combat password sharing, the platform is looking into the possibility of introducing lower cost subscriptions with advertising.
Today, however, Netflix still has 221 million subscribers and remains the industry leader.
The practice of password sharing is probably not the only factor in subscriber attrition. Its subscriber base had grown considerably as a result of the pandemic and the various lock-ins. There is a ‘catch-up’ effect with the return to normalcy, and the change of pace of millions of households.
On another level, Netflix was also one of the companies that pulled out of the Russian market and so obviously lost subscribers as a result. “Without this impact, we would have had 500,000 additional subscriptions” compared to the previous quarter, the company said in a statement quoted by Agence France-Presse (AFP). It is also necessary to consider the increase in competition, with the appearance of many other streaming services such as Disney +, Amazon Prime Video, and Apple TV +, which take subscribers from Netflix, because not all customers choose to accrue the providers. The possibility of finding certain programmes on these competing platforms makes Netflix less attractive: for example, Disney productions, which used to be available on Netflix, and are now accessible on Disney +. Finally, Netflix has chosen to increase its prices in several countries, which has obviously had a dissuasive effect on many subscribers.
Billionaire Elon Musk, who has just bought the Twitter platform, has another explanation for the drop in Netflix subscribers. He blames the platform’s excessive submission to the woke ideology, which ultimately turns off viewers who are tired of having to put up with a steady stream of progressive propaganda in the programmes they are offered. “The woke mind virus is making it unwatchable,” he said in a tweet in response to Netflix’s announcement that it had lost 200,000 subscribers.
This is not the first time Elon Musk has attacked the woke ideology. In an interview with The Babylon Bee published last year, he explained that “wokeness basically wants to make comedy illegal.” “Do we want a humorless society that is simply rife with condemnation and hate basically? At its heart, wokeness is divisive, exclusionary, and hateful. It basically gives mean people a shield to be mean and cruel, armored in false virtue.”
For now, the Netflix platform is not about to follow the billionaire’s recommendations. Last year, it even commissioned a diversity study that concluded that LGBTQ+ and disabled characters were underrepresented in Netflix series.