Netflix loses subscribers, and Elon Musk thinks he knows why
There were crazy scenes in Mediaville yesterday, as Netflix posted a loss in subscriber numbers for the first time in 10yrs. As if that wasn’t mind-boggling enough already, after a period of seeming invincibility for the streaming giant, Elon Musk decided to get in on the act… Blaming the platform’s performance on the ‘woke mind virus’.
Netflix was delivering its Q1 2022 results yesterday, when it broke the news by way of a letter to shareholders:
‘Our revenue growth has slowed considerably as our results and forecast below show. Streaming is winning over linear, as we predicted, and Netflix titles are very popular globally. However, our relatively high household penetration – when including the large number of households sharing accounts – combined with competition, is creating revenue growth headwinds. The big Covid boost to streaming obscured the picture until recently.’
The platform lost 200,000 subscribers globally during the period, and is now looking at adding advertising to the mix, to help subsidise lower subscription fees. In addition to people re-entering the real-world in the post-pandemic era, Netflix also said that its decision to close up shop in Russia had been a significant factor in limiting its ability to replace departing subscribers with new ones.
Never one to shy away from media controversy, Elon Musk waded into the conversation early, responding to a tweet on the subject with one of his own: “The woke mind virus is making Netflix unwatchable.”
What does that even mean? Well, nothing really… Musk’s criticism of the platform appears to be based on his own assessment that it is too ‘woke’ for contemporary audiences, e.g. with shows about men having babies and such.
But this is unlikely to be the case, for a number of reasons:
- If we think back to Squid Game for example, one of the platform’s most recent and biggest hits, both subject matter and tonality seem far removed from the battle-hardened cries of the Twitter offence hunters.
- Netflix is also crammed full of hard-hitting documentaries that aren’t afraid to tackle difficult subject matters (‘How the Nazis lost the war’, springs to immediately to mind).
- Also, if you think about Disney+, the current MVP in the space, they have to be infinitely more aware of cultural sensitivities and non-controversial content, given the high proportion of children watching, and cultural caution doesn’t seem to have done them any harm…
More likely, the issue is what the company’s letter to shareholders says on the tin: the backlash from pandemic (over)subscriptions is now well underway, and streaming services – as well as publishers – would do well to focus on minimising churn.