News material Undoubtedly unlucky, Netflix is now threatened by its shareholders
Following the announcement of a subscriber loss for the first time in its history a few weeks ago and a sharp drop in the stock market, Netflix is once again in turmoil, after many shareholders accused the streaming giant of hiding important information from them.
The war in Ukraine undermines Netflix’s strategy
Surely nothing is going well with the world’s number one streaming… After being forced to revise its growth ambitions after dropping its subscribers for the first time in its history, Netflix must now contain the slingshot of some of its the most influential shareholders.
In a January 4 press release, a group of investors expressed surprise and concern at statements that Netflix found to be false or misleading. The announcement on April 19 of the first quarter results confirmed the trend and the balance sheet then reported 200,000 fewer subscribers compared to the last quarter of 2021. Earthquake for the streaming leader, after the action lost 25% in one day and even up to 35% the day after the announcement.
Netflix is losing 200,000 subscribers, is that so serious?
While many factors can explain this sudden decline, The war in Ukraine and the suspension of 700,000 subscriptions to Russia are the main factors highlightedotherwise the platform would have actually registered more than 500,000 new subscribers.
It was enough to force this group of investors to take action and, therefore, an appeal was lodged on May 3 in the San Francisco federal court with Rai
But why is it so serious?
The problem, even if it is real, does not come so much from the loss of these famous 200,000 subscribers, but rather from the fact that Netflix expected to gain 2.5 to 3 million subscribers over the same period. If we subtract the 700,000 fewer Russian subscribers, we should have between 1.8 and 2.3 million additional subscribers and not a negative balance of 200,000.
Another factor put forward to explain the decline in growth is the ever-increasing number of accounts being shared without authorization. Netflix estimates that today 100,000,000 (yes yes 100 million) households enjoy services illegally. With this in mind, the platform is conducting tests in Chile, Peru and Costa Rica to force illegal users to pay what they owe.
Amid less consolidating content, ever-increasing prices and internal crises, Netflix is not having its best season. The stock fell from $ 348 on April 19 to “just” $ 188 today, a staggering drop of over 48% !
There is no doubt that the world number one on-demand video will be able to recover, but the road may be long, especially as subscribers are expected to drop further in the second quarter with TikTok, YouTube and games as torturers. Videos coming to hurt him according to Netflix.
And this is the essence of the accusations made by shareholders in their lawsuit in the federal court of San Francisco that accuses Netflix:
The failure to announce that the increase in subscriber acquisition has slowed, among other things due to multi-customer account sharing and increased competition from other streaming services.
With LudolinkJournalist jeuxvideo.com