The post-pandemic era seems very challenging for Netflix, with its shares tanking earlier this year, and losing 200,000 of its subscribers in the first three months of the year, the company said on Tuesday.
The streaming giant is forecasting even bigger losses to come. It is expecting losing up to 2 million subscribers in the second quarter of this year.
In a letter addressed to its shareholders, the company said "Our revenue growth has slowed considerably,". "Covid clouded the picture by significantly increasing our growth in 2020, leading us to believe that most of our slowing growth in 2021 was due to the Covid pull forward."
The decline in number of subscribers came after the company increased prices in major markets including the US and UK, while pulling out of Russia that has cost Netflix 700,000 subscribers, the company said.
Despite all these challenges, Netflix seems to be optimistic and determined to improve the numbers with new solutions. The company announced its plans to to create a lower-priced version of its service that has advertising.
Although the company's co-founder and chairman Reed Hastings has long been opposed to adding commercials or other promotions to the service, brought up the potential for advertising on a call Tuesday with investors after he announced losing the 200,000 subscribers.
"Those who have followed Netflix know that I’ve been against the complexity of advertising and a big fan of the simplicity of subscription," Hastings said on the call. "I’m a bigger fan of consumer choice, and allowing consumers who would like to have a lower price and are advertising tolerant to get what they want, makes a lot of sense."
The company will work on creating an ad-supported version of the service over the next year or two, Hastings added.
It's worth noting that the company's share price fell close to 20% on news of losing the 200,000 subscribers globally.
