Xiaomi Shares Jump on Europe EV Expansion Plan 
Nvidia Pauses AI Cloud Financing Deals Amid Antitrust Concerns 
SpaceX Mobile Network Could Cost Up to $130 Billion, Bernstein Says 
Chinese AI Stocks Rally After OpenAI Launches GPT-6 Astra 
Adobe Names Anil Chakravarthy CEO as AI Push Accelerates 
Thomson Reuters C-Track Cyberattack Hits Courts Across U.S. and Canada 
Lenovo Shares Fall After Dropbox Security Breach Exposes ID Vulnerability 
PayPal Shares Sink as $50 Billion Takeover Bid Collapses 
Texas Republicans Turn Against AI Data Centers as Election Backlash Grows 
Google Changes EU Spam Policy Amid Antitrust Scrutiny 
MongoDB Stock Sinks 14% as Atlas Growth Misses Expectations 
Apple’s Phil Schiller Steps Back as Leadership Shake-Up Accelerates 
Nvidia Eyes $2.5 Billion Investment in Thinking Machines Lab 
Anthropic IPO Marketing Expected to Start in Mid-October 
South Korea, US Discuss Chip Investments Amid Tariff Plans 
OpenAI Nears Astra AI Model Launch With Safety Focus 
Add as a preferred source on Google
Netflix executives have previously not been so open about introducing a cheaper subscription tier supported with advertisements. But that seems to be changing after the company confirmed it lost subscribers over the last quarter.
The company released a letter to its shareholders for the first quarter of 2022 and confirmed that Netflix lost 200,000 subscribers in the last three months. This is the first time the streaming giant reported a membership loss for a quarter over the last 10 years. And the streaming giant said in its forecast that it expects to lose 2 million paid memberships in the second quarter of the year. Netflix shares plunged by more than 25 percent after trading hours on Tuesday.
Following this series of bad news, Netflix seemed to have softened its stance on ad-supported lower-cost membership tiers. “Those who have followed Netflix know that I have been against the complexity of advertising and a big fan of the simplicity of subscription,” co-CEO Reed Hastings said (via CNBC) in a pre-recorded earnings call on Tuesday. “But as much as I am a fan of that, I am 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.”
Just last month, Netflix CFO Spencer Neumann said that an ad-supported tier was not part of the company’s plans. The comment came a few days after Disney+ announced it will offer a membership plan with ads at a lower cost sometime in 2022.
In the same financial report, Netflix said it is seeing slowing revenue growth and identified several factors that caused it. For one, the company says there are 100 million “additional households” that access its services through account sharing. Netflix added that this is one of the reasons “it’s harder to grow membership in many markets.”
It is worth noting that Netflix has heavily hinted at cracking down on password sharing by introducing an Extra Member Fee that has been in testing for a month now in Chile, Costa Rica, and Peru. It is unknown if this experiment will be extended to other regions. But considering Netflix has now identified account sharing as one of the main reasons for its slow revenue growth and subscriber loss, it might be just a matter of time before the added fee becomes official worldwide.
Photo by Thibault Penin on Unsplash
