International Thursday #8
Netflix had a little crash, little crash, little crash, Netflix had a little crash, password share mat karo...
Netflix's stock on the US Stock Market crashed significantly on Tuesday(in the US). In just one day, it fell by 32.4% to a price of $235.76, from a day high of $347.6.
Netflix released its report for the first quarter of 2022, which showed that it had lost 2,00,000 subscribers in the opening 3 months of the year. It cited many reasons for this, slowing revenue growth, competition from other streaming platforms, and even password sharing. Other than, an increase in the cost of living around the world (which can be linked with the Ukraine-Russia war) and its own price raises can also be blamed.
Netflix hugely depends on every household/user to have a different account for use, which is its source of revenue. Users can easily bypass this mechanism by logging into the same account from different households by sharing the password. This means two households can share the costs of the subscription while still being able to access all the content the streaming giant has to offer.
The company will try to counter this by banning password sharing, the mechanisms for which it is testing out in a few countries in Latin America. Their CEO, Reed Hastings said that countering password sharing was not a point of focus in the early stages of the company but it may now be, in an interview with the BBC.
Written by:-
Miheer Karandikar