Netflix Inc remains the “global champion” of streaming, its co-CEO said, blaming the loss of 200,000 subscribers in the first quarter on inflation that has prompted households to reduce spending.
“Every customer is asking the question of the value of a subscription in relation to its cost,” Ted Sarandos said yesterday in an interview with French newspaper Le Journal du Dimanche.
Netflix’s vision to “satisfy the consumer” remains intact, he added, citing the popularity of the new season of Stranger Things.
Photo: Reuters
Netflix has been trying to bring costs under control as its subscriber growth slows. As part of those efforts, the streaming giant has laid off employees, including 150 in May and another 300 last month.
The company is “adapting to the slowdown in growth compared to projections,” and is doing so “without limiting spending on content production, which will reach 17 billion euros [US$17.31 billion] in 2022,” Sarandos said.
The introduction of ads will be global and make Netflix’s business model more complex, he said, but should allow the company to attract customers who want to pay less.
Netflix has more than 10 million subscribers in France, Sarandos said, compared with 6.7 million in 2020, the last time it reported the figure.
It is investing 200 million euros in French content this year, including 40 million euros on films released first in French movie theaters. It recently bought the rights to stream Johnny Depp’s next movie in France.
Still, Sarandos criticized an exclusivity arrangement with local cinema guilds that makes Netflix wait 15 months after a film’s release in French theaters before putting it on the streaming service.
“The appropriate time frame is a few weeks, not a few months,” he said.
Separately, Amazon.com Inc’s number of Prime members in the US stagnated in the first half of the year, suggesting a US$20 annual price increase that took effect in February could be deterring potential customers struggling with high gas prices and inflation.
The online retailer had about 172 million members as of last month paying yearly or monthly dues in exchange for shipping discounts, video streaming and other perks, the same as six months earlier, according to Consumer Intelligence Research Partners, a Chicago firm that tracks Prime members through consumer surveys.
Amazon in February raised the price of Prime membership to US$139 from US$119 for those paying yearly, and to US$14.99 from US$12.99 for monthly service. The higher prices, along with inflation and the resumption of brick-and-mortar shopping habits, cooled demand for Amazon services.
“After years of steady and even explosive growth, Prime membership is flat,” Consumer Intelligence partner Michael Levin said.
The Seattle-based company signed up a combined 60 million US Prime members in 2020 and last year, when shoppers increased online shopping during the COVID-19 pandemic, the firm said.
Prime helps Amazon convert occasional shoppers into loyal customers, as members typically spend more on Amazon than non-members.
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