All it took wasa dip of 200,000 members (Netflix’s preferred term for subscribers) from a global total of 222 million to wipe 25 per cent – more than $54 billion – off its market value.
Netflix had the excuse of the suspension of services in Russia,which resulted in a loss of 700,000 members,but the fact the result fell so far short of the 2.5 million members it had predicted it would add just three months earlier – and the fact it predicts shedding another 2 million next quarter – clearly had the market rattled.
In a video Q&A after the results were released,senior executives including founder and co-CEO Reed Hastings and content boss (and fellow CEO) Ted Sarandos suggested it was no more than a temporary blip. But Hastings did point to two factors that aren’t going away anytime soon:market saturation and increased competition in the subscription video on demand (SVOD) space.
“We’re getting pretty high market penetration and that,combined with the competition,is really what we think is driving the lower acquisition,lower growth,” Hastings said.
That would appear to tally with the experience in Australia,where there are now more than 20 subscription-based streaming services,plus five free-to-air BVOD (broadcast video on demand) options (iview,10Play,9Now,SBS On Demand and 7Plus) available to viewers.
According tothe most recent data from Roy Morgan,almost three-quarters of Australians watched at least one SVOD service in the final quarter of 2021. But while the Australian SVOD market grew by 2.5 per cent between October and December,Netflix added just 0.1 per cent to its viewer base (the data captures viewers rather than subscriber numbers).