Netflix, the world’s largest streaming service, surprised its investors this week by reporting a drop in subscriber counts in the first quarter of the year. After falling short of its own expectations and slipping into reverse, the media behemoth’s stock dropped more than 35% and the firm lost as much as US$60 billion in value.

NFLX is the worst-performing stock in both the S&P 500 and the tech-heavy Nasdaq 100 indexes this year, having lost more than two-thirds of its market cap since November last year.

What’s the story behind the company’s latest setback?

In the first three months of 2022, Netflix had its first subscription drop in in than a decade, with 200,000 subscribers leaving the service. The result was a major ‘miss’ when compared to the company’s previous prediction, which predicted 2.5 million new members during the same time period. As if that wasn’t bad enough, the company’s future prospects have further worsened the situation.

The company’s subscriber base is expected to drop by another 2 million people in the second quarter of 2022, according to management.  To put this in context, the corporation has routinely been able to grow its subscriber base by at least 25 million customers per year. That era seems to have finally ended.

The first quarter of 2022 revealed a difficult backdrop, with the company losing customers in three of its four core geographic segments. Netflix lost 600,000 users in the United States and Canada alone, and its results would have been significantly worse if not for a solid performance in Asia.

But what is behind these losses? 

Netflix attributes the decline in their business to a number of factors, including the relaxation of pandemic restrictions. While stay-at-home orders were in effect, the streamer benefited, but as lockdowns were eased, households began to shift their focus and money elsewhere. At the same time, increased competitiveness is a hot topic in the media streaming industry. Amazon is heavily investing in its Prime Video service, Apple is following suit, and Disney, HBO Max, and others are all vying for the same subscriber base.

Following increased content investment to drive subscriber growth, Netflix recently announced a price hike. With Joe Biden’s increasing inflation, people are starting to see Netflix as a luxury item they can do without and are canceling their subscriptions. 

The final reason Netflix claims is hurting their business is password sharing, which they claim is limiting their upside growth. They estimate that up to 100 million households around the world are participating in the activity, which they previously ignored.

In response to their massive losses, Netflix is considering launching a cheaper, advertising-supported option for users in the coming years as a result of the large loss in customers. However, intelligent customers believe Netflix has another issue that is limiting their development that they are refusing to address: wokeness.

From the self-own of their global virtue-signal of shutting down their service in Russia after the Ukraine invasion, to their far-left content that turn off more and more subscribers, Netflix is doing themselves no favor. 

Amala Ekpunobi recently explained how Netflix is “full of propaganda” during an appearance on “The Ingraham Angle.”

I think it’s this woke mind virus and people are waking up and inoculating themselves from it. They don’t want to hear this anymore, and Netflix is known to be doing this. They put out a French film called “Cuties,” with 11-year-old girls with barely any clothes on, twerking and shaking their butts on film. They have a series called “You” where they denounce people who are anti-Covid vaccine. They’re full of propaganda. They’ve subscribed themselves to anti-Whiteness, anti-racism, radical feminism, and that’s what they put in their content. You can’t find a piece of Netflix content that does not have leftist ideology embedded in it. And I think people are fed up with it. They don’t want to pay a monthly fee to be lied to and to be fed propaganda, and to be told that they are hated. 

…

I as a Black person do not want to hear this demeaning message about how I need help from you, and how I need help from the rich and how we need to invest in Black business. What is Netflix doing for Black people or for lower income communities? Virtually nothing. When this whole Black Lives Matter scandal broke out and people were taking to the streets – what did Netflix do? They opened up a category on their streaming service for Black creators and Black content, not only segregating their consumers and creating a divisive climate, but doing nothing for Black people in their efforts. It makes no sense. It’s all virtue-signaling and it’s all propaganda. That’s all that they want. 

Watch the entire interview here:

Netflix has recently been preoccupied with woke, left-leaning content, which the general public despises. Hollywood’s woke content, which has infected Star Wars, Ghostbusters, and Doctor Who  have been total disasters. Netflix could have taken a hint and realized people might be tired of all the virtue signalling, and if they provided them with quality content, they would surely reward you with a subscription.

But they double down on it. Shows like Dear White People, The Get Down, Sense8, and others that lean into identity politics, were actually praised by The Wrap as must see shows in order to “Stay Woke,” and Netflix regularly portrays Christianity in a negative light. The First Temptation of Christ, which portrays Jesus as gay, drew criticism both online and offline. 

The company’s decline is also a reflection of the failure of its costly partnership with former president Barack Obama. In 2018, Netflix signed a multi-year agreement with the Obama’s to produce films and series. While it’s unclear exactly how much money they burned to hire the Obamas, we know that Netflix paid the creator of Glee $300 million for a five-year deal, so it’s a sure bet that the amount for the Obama’s was exorbitant.

On April 13, Netflix released all five episodes of its documentary series Our Great National Parks, produced and narrated by Barack Obama. While left-wing culture critics in the liberal media received the series warmly—one at least admitted, “I can’t say that I learned a tremendous amount”

Clearly Netflix’s investors were less convinced.

It is not the price, and it is not the password sharing. It’s the content stupid. And it remains to be seen how long the remaining users will stay loyal to the media streaming giant. Netflix has indicated it might be a 1-2 year timeline before the company can fully harness the benefit of its efforts. I say it won’t turn around until they recover from the “woke mind virus” that has infected the company.

What do you think? Has Netflix lost its mojo or is this a temporary setback?