Netflix Is Being Sued Following Slump In Subscribers
Topics: Netflix, TV And Film
Featured Image Credit: Netflix
Topics: Netflix, TV And Film
Netflix has reported a huge drop in subscribers this quarter following a number of decisions made by the streaming service company.
It lost $50 billion from its market cap in April after reporting a net loss of 200,000 subscribers for the quarter, when it had previously predicted a net gain of 2.5 million. Netflix lost around 700,000 subscribers after it pulled the service from Russia, and Russian companies sought to gain over ₤500,000 in damages for the loss of service. Further subscriber losses resulted from the decision to raise the price of all subscription tiers, and the decision to crackdown on and charge for password sharing between households.
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Netflix has announced that it will implement a number of changes to negate the losses. It has suggested a new, cheaper tier which will contain adverts, as well as cancelling a number of shows. The company has said it aims to focus on cheaper projects which will encourage the most new subscribers.
Comic Book has reported a new lawsuit which has been filed by shareholders against the company. The lawsuit alleges that Netflix "made materially false and/or misleading statements, as well as [failing] to disclose material adverse facts about the company's business, operations, and prospects, [and also] positive statements about the company's business, operations, and prospects were materially false and/or misleading and/or lacked a reasonable basis." This is considering how it was "exhibiting slower acquisition growth" and "experiencing difficulties retaining customers."
The shareholders are looking to gain damages equal to the amount they lost due to Netflix allegedly concealing this information. This would not equal the $50 billion the company lost, only the money which the lawsuit can prove investors lost through Netflix’s statements.