Following the thunderstorm in the last financial report, Netflix Inc's latest financial report was once again surprising, with the number of global net paying users falling by 200000, the first time in 11 years that net subscribers fell instead of increasing, while the company had expected to increase by 2.5 million and the market had expected to increase by 2.73 million.

Due to its disappointing performance, Nai Frisbee plunged more than 25% and its share price pushed down $260, the lowest in more than three years since the end of December 2018. Netflix Inc also plunged 25 per cent in after-hours trading when last year's four seasons report was released in late January. To make matters worse, Netflix Inc's share price has plummeted 42% so far this year, far more than the Nasdaq 100 index's decline of about 13%.

Two consecutive quarters of financial results thunderstorm, to the hearts of investors branded with a big question mark: Netflix Inc is not good?

Generally speaking, users are the lifeblood of streaming media platform. Now, Netflix Inc, as a global streaming media platform giant, does its user performance mean that the number of users in the entire streaming media industry is about to peak, and whether streaming media will collectively encounter landslides?

After Netflix Inc announced the results, the shares of other streaming companies fell in after-hours trading.

Among them, Roku, one of the most popular streaming platforms in North America, fell more than 8% at one time, Walt Disney Company and fuboTV fell more than 5% at one point, and the share prices of other media companies such as Warner Brothers, Paramount and Spotify Technology SA also fell.

With the entry of traditional platforms and the rise of new platforms, the war of robbing people is more difficult.

Netflix Inc has been a leader in the field of streaming media for the past decade. However, with the entry of traditional platforms and the rise of new platforms, the competition in the field of streaming media is becoming more and more fierce. Walt Disney Company, HBO, Paramount, Peacock, Apple Inc, Amazon.Com Inc and more competitors are following in Netflix Inc's footsteps.

These competitors not only compete with Netflix Inc on new projects, but also take back a lot of content that used to run on Netflix Inc.

In January 2020, Warner officially withdrew the drama Friends from Netflix Inc and launched it on Warner's own streaming platform HBO Max five months later.

According to App Annie, the mobile intelligent platform, on the day of its premiere, the number of downloads of HBO Max increased by 30% over the previous day, making it 10 places higher in the ranking of non-game applications on the IOS and Alphabet Inc-CL C Play platforms.

The veteran comedy "the Office" is currently broadcast on NBC Universal's Peacock streaming platform, and Walt Disney Company withdraws all its content running on Netflix Inc's streaming platform Disney+.

The expansion of the range of optional platforms is bound to lead to the dispersion of users.

Netflix Inc said in the financial report that while competing for viewing time with competitors such as YouTube, Amazon.Com Inc, Hulu and Walt Disney Company +, more and more traditional entertainment companies are moving into streaming services, resulting in the loss of some users and revenue from Netflix Inc.

Probably frightened by the first decline in the number of subscribers in more than a decade, Netflix Inc CEO Reed Hastings (Reed Hastings), who has always opposed the addition of commercials and other promotional content to the platform, announced on the earnings call.Netflix Inc will start offering low-cost subscription services that can be plugged into ads.

"those who follow Netflix Inc know that I have always been opposed to complex advertising and like simple subscription services very much," Hastings said. " "I like this very much, but I prefer consumers' choices, which makes sense for consumers who want lower prices and are not sensitive to advertising to get what they want." But Hastings says the service may not be available in the next year or two.

However, Netflix Inc is still a step behind.

In early March, Walt Disney Company, who also hated such services, announced that from the end of 2022, Walt Disney Company would push "Disney+" into the global online video market, which is cheaper, but will insert advertisements.

In fact, providing member service for advertising is becoming a trend in the field of streaming media. Before Walt Disney Company, Warner Media, Paramount, NBC Universal, Discovery (now merged with Warner Media) and other platforms have launched advertising member products.

The introduction of ad membership services on these platforms comes at a time when streaming platforms are investing more in free subscription services. Last week, Amazon.Com Inc stepped up investment in his advertising-backed IMDb TV free streaming service, renaming it Freevee, highlighting its free nature, and announced plans to expand its program budget.

When a bird's nest is overturned, no egg can remain intact

Netflix Inc follows other streaming media to snatch users with low-cost advertising membership service, which on the one hand reflects the fierce competition.On the other hand, it also reflects that consumers' ability to pay is declining.

Kelly Metz, managing director of senior TV activation at advertising giant Omnicom Media Group, said the emergence of streaming ads "is ultimately good news for American consumers who can't maintain paid subscriptions."

There is an upper limit on the actual affordability of American consumers, just like the cable TV we have seen in the past.

Netflix Inc also pointed out in his letter to shareholders that the sharp slowdown in income growth is partly due to the general environment.

Macro factors may also have a negative impact on Netflix Inc's income, including weak economic growth, rising inflation, Russia-Ukraine conflict and other geopolitical events, as well as the continued interference of the COVID-19 epidemic.

Netflix Inc blamed part of the blame on the environment. However, the data show that Netflix Inc's core market, the United States, is facing the highest level of inflation in more than 40 years, and high food and energy prices are bound to further affect the purchasing power of ordinary consumers as the Fed accelerates its "water collection".

I can't even afford to eat, so how can I have spare money to buy video members? Analyze and point outNetflix Inc may not have added more subscribers than expected for three consecutive quarters, indicating that subscriber growth is entering a plateau, especially in the US market, where Netflix Inc's first-quarter subscriber decline was the biggest in its history.

This has also been confirmed in the British market. High inflation and fever have reduced the affordability of British households, forcing them to cut unnecessary spending, including video subscriptions. British consumers cancelled about 1.5 million video subscription accounts in the first three months of this year, a record level, according to market research firm Kantar.

Rampant account sharing

The growing popularity of shared accounts has become a big problem for Netflix.

For consumers, by sharing accounts, consumers have the opportunity to enjoy the services provided by the streaming media platform at a lower price or even without spending money. But for the platform, this kind of behavior is tantamount to "stealing".

According to the data provided by Netflix Inc on TuesdayIn addition to 222 million paying households, the company estimates that more than 100m additional households share accounts with existing users, including more than 30 million households in the core market in North America.

In a letter to shareholders, Netflix Inc admitted that it intended to indulge out-of-family account sharing because it could make users addicted to services. But now the competition is getting fiercer and fiercer, and Netflix Inc wants families who use shared passwords to pay to watch.

Netflix Inc warned of a global crackdown on account sharing and hinted that there could be big changes as soon as 2023.

Netflix Inc said he was already testing a project to turn some viewers into paying viewers, calling it "a huge short-and medium-term opportunity".