Netflix is grappling with slow subscriber growth as the company’s executives recently warned employees to be mindful of spending and hiring, according to three people familiar with the discussions. Netflix warned its employees last month at Netflix management offsite event in Anaheim, Calif. Then, it was again discussed at an employee town hall meeting.
Netflix warned its employees about mindful spending as its growth slows
The video streaming giant saw double-digit subscriber growth for several quarters, but, in the fourth quarter of 2021, Netflix’s subscriber base grew just 8.9%, compared to 22% in the same period in 2020. To battle the declining growth, the company has also raised its prices in the U.S. and Canada by $1 to $2 per month and has started cracking down on rampant password sharing.
Although, Netflix didn’t respond to the news the company’s warning to its employees is a clear indication of declining subscribers. After the release of The Information’s report, Netflix’s stock declined slightly in after-hours trading. The company rode a roller coaster during the coronavirus pandemic, with steep growth early in 2020 when people were staying home and movie theatres were closed, followed by a slowdown in 2021.
Rivals are slowly taking over
Netflix has about 222 million total subscribers, and larger conglomerates like Disney (which also owns Hulu and ESPN) have continued to expand at a more aggressive pace. Disney ended 2021 with 179 million total subscribers across Hulu, Disney+ and ESPN+, and it plans to double the number of countries that Disney+ is available in by 2023. Netflix wrote in its letter to shareholders, admitting that competition is affecting the growth; “Consumers have always had many choices when it comes to their entertainment time — a competition that has only intensified over the last 24 months as entertainment companies all around the world develop their streaming offering.”
Source: The Information