Netflix suffered its first subscriber loss in more than a decade, causing its shares to plunge by 25 percent. The streaming giant reported the loss of 200,000 subscribers during the first quarter, triggering a drastic downfall in its stock prices.

The news sent shockwaves across the world, with notable personalities, including Tech billionaire Elon Musk, weighing in their views on why Netflix has been witnessing an unprecedented slump.

Elon Musk, who has open aspirations to buy the whole of Twitter Inc., took to Twitter to share his thoughts about why Netflix has been losing its customer base. In his tweet, Musk held the “woke mind virus” responsible for making Netflix “unwatchable”.

The Tesla CEO was replying to a tweet by Slashdot.com saying that it’s ‘the woke mind virus’ that is making Netflix unwatchable. Musk’s opinion on Netflix triggered speculation about the streaming giant’s future given that the last time when the Billionaire expressed his disgust for wokeness, he ended up buying a 9.2 percent stake in Twitter, a company he felt was consistently performing below par. Later, he offered $43 billion to buy out the social media tech giant.

Netflix's global subscriber base declined by 200,000, a rare reversal and far from the internal projection of 2.5 million additions in the period

Elon Musk’s castigatory tweet on Netflix triggers social media speculations

With Elon Musk speaking on Netflix’s losses, social media users could not help but start speculating about the fate of the streaming behemoth. Many Twitter users agreed with Musk and took a dig at Netflix over its content. A user tried to suggest that in the wake of Black representation, Twitter might come up with a series on Russian President Putin played by a Black actor.

Another Twitter user suggested that woke mind virus is the biggest threat facing the civilisation, to which Musk responded in the affirmative.

When a Twitter user asked Elon Musk which shows he finds infected by the ‘woke Virus’, A social media user shared a poster of a series apparently screened on Netflix that depicted a man getting ready for his pregnancy.

Another Twitter user was quite straightforward in asking Musk to buy Netflix and purge it of the woke content.

Still another user commented that after Musk takes over Twitter and fires its employees for not showing up in the office, Netflix will be his next takeover.

Elon Musk offers to buy out Twitter

The Internet has already started pondering over whether Netflix is next on Elon’s list of purchases after Twitter. After the open condemnation of Twitter’s biased algorithmic policies, Elon Musk came out as the biggest independent shareholder in the company. Later, he straightforwardly proposed to buy the company and make it private. It could only be a possibility for the world to wake up and see the world’s richest man trying to battle it out with ‘wokeness’ with his purchasing power.

Reportedly, the streaming Giant has expected to lose over 2 million subscribers in the second quarter. The company said that the suspension of its service in Russia and the cutting down of all of its Russian paid memberships resulted in a loss of 7 lakh subscribers. Earlier, Netflix CEO Reed Hastings was anguished about the company’s lackluster performance in India while recording a slump in the growth of its subscriber base. When Hastings had expressed his concerns in an interview, Netizens too had blamed Netflix’s poor performance owing to its woke and Hinduphobic content.

Netflix Co-CEO Reed Hastings has called the firm's lack of success in India "frustrating". It has slashed prices twice. Still, its cheapest mobile-only plan of Rs 149 a month is one of the costliest amongst its peers

Netflix’s lack of success in India is‘ frustrating’, cofounder Reed Hastings says

Netflix co-founder, president, and co-CEO Reed Hastings said in an investor call on Thursday that the lack of success in the Indian market is "frustrating" but added that the company is "definitely leaning in there".

The Los Gatos, California-based global streaming giant, which saw its shares tumble after it said it expects to add just 2.5 million news subscribers in the current quarter—the lowest for the first quarter in close to 10 years, added 2.6 million new paying subscribers in the Asia Pacific region in the last quarter (compared to 2 million in the same quarter last fiscal), with strong growth in both Japan and India.

While Netflix has never revealed the number of subscribers in India, market estimates place the figure between 4.3 million and 4.5 million, a fraction of rivals Disney+Hotstar (close to 36 million) and  Amazon Prime Video  (over 17 million).

Earlier in December, Netflix had slashed pricing in India to make the service affordable to a wider set of consumers. But many experts believe the move will primarily add subscribers who were already using the service through account sharing.

The change in pricing follows a whole set of activities that the company has been doing in India over the years, Greg Peters, Netflix’s chief operating and product officer, said during the webcast on Thursday. "We have been operating there and learning more about Indian consumers' tastes, et cetera, and that's broadening the offering of the service across many, many different dimensions," Peters said. "We felt it was the right time to decrease our prices there, to increase accessibility to all... we're doing this through the lens of what's the long-term sort of revenue maximisation.”

Peters said that while Netflix anticipated a drop in the average revenue per member because of the price cuts, it would make up for it with more subscriber additions.

"I would say it's still very early to look at India. And for some of these effects, like retention, it takes a couple of months to get a very clean read on them,” he said. “But the early data that we are seeing very much supports a positive read on that lens of revenue maximisation through these changes.”

Overabundant Emphasis On Woke Content Likely The Reason Behind Netflix Losing Nearly Half Million Subscribers In The United States And Canada

Earlier, Hastings said that a unique thing about India was the pay-TV pricing, at around $3 per month per household. "Radically different pricing than the rest of the world, which does impact consumer expectations," he said.

When asked if Netflix will consider sort of right-sizing content spend or maybe consider an ad-supported model, he said that it will be a long time before the company adjusts its model materially.

Netflix, which was the first global OTT service to launch in India in 2016, started building a team and investing in original content after two years.

Hastings said in 2018 that the company was going to invest Rs 2,000 crore in two years on content in India, more than the combined programming budgets of the top four Hindi general entertainment networks put together.

However, many of the shows and films have yet to attract large numbers of subscribers.

Experts blame it on Netflix’s strategy and approach of “throwing money at every problem”.

“One of the biggest issues with Netflix in India is that there is no clarity on which market they are playing in. Is it reasonable to pay Rs 85 crore for a ‘Sooryavanshi’? They have always been infatuated with Bollywood, and the regional strategy is also too little too late,” said a senior executive at a rival service.

A senior executive, who left Netflix last year, said that the brand is very strong, but they must work on whether they want to focus on retaining a subscriber and increasing engagement from her or adding new subscribers.

"In India, it’s only the first," he said. "Also, when I was at Netflix, it seemed we all stopped thinking about the ROI (return on investments). We all had an unlimited budget to spend on content, marketing, publicity, and so on. There was no question of accountability, " he said.

During the investor call, Netflix Group CFO Spencer Neumann said while the company has, what they believe, is a "terrific business" and a "terrific business model" that scales so well, it's also super hard in every country.

"Every country is on a different adoption curve, and we talk about product-market fit, but even though everyone loves film, TV, and even games, it is very specific. Entertainment is still fundamentally pretty local around the world. So it's global and local, and we need to figure that out, " he said while answering about India.

References:

opindia.com