TAMPA, Fla. (WFLA) — Elon Musk continued his recent commentary on tech companies this week, this time targeting Netflix after the streaming company reported a loss of 200,000 subscribers and its stock slid 35% since its latest earnings report. It was its first reported loss of subscribers in over 10 years.
No stranger to making jabs at other companies and social topics, Musk went after Netflix for being “woke,” a critique carrying echoes of recent political talking points.
“The woke mind virus is making Netflix unwatchable,” the SpaceX and Tesla CEO tweeted.
Some users responded and disagreed that it was a woke mind virus causing Netflix to lose its audience, and more the advent of new streaming services that have launched, such as HBO Max or Disney+ affecting the company’s market share.
In additional comments about Netflix on Twitter, Musk asked that the company “please just make sci-fi/fantasy at least *mostly* about sci-fi/fantasy?”
Reed Hastings, the founder and CEO of Netflix, said during an earnings call on Tuesday that the company had “great competition” with “some very good shows and films out,” and that Netflix had to “take it up a notch,” despite the current disappointment for investors.
According to Netflix Chief Financial Officer Spencer Neumann, part of the loss of subscribers was also from the company pulling out of Russia and dropping service in the country amid its invasion of Ukraine.
“The difference is some slight elevated churn throughout Q1,” Neumann said. “It’s a combination of factors there, we talk about interrelated factors there, we talk about interrelated factors in the letter, but one very directly was Russia’s invasion of Ukraine, had some spillover effect in other parts of the media. We saw that in some Central and Eastern European countries that there was some elevated churn.”
Regarding the added fee for account sharing, Neumann said the company was trying to “monetize sharing and meet our members where they are,” saying that subscriber or member numbers were going to be less relevant over time, while average revenue per member would grow in impact in the long-term.
Netflix leadership said the company was planning to try out lower-priced, ad-support subscription plans as another method of increasing revenue and profit.
“One way to increase the price spread is advertising on low-end plans, and to have lower prices with advertising,” Hastings said. “And those who have followed Netflix know I have been against the complexity of advertising and a big fan of the simplicity of subscription, but as much a fan I am of that, I’m a bigger fan of consumer choice. And allowing consumers who would like to have a lower price and are advertising-tolerant get what they want makes a lot of sense. That’s something we’re looking at now.”
Hastings said it was something the company would be exploring over the next two years, and that the company was “quite open to offering even lower prices, with advertising” as a consumer choice option.
The potential for advertisements would be a first for Netflix, but the possibility comes after the streaming company began testing a way for households to share service with others for an extra $3 per month. Right now, that test pilot program is underway in Chile, Costa Rica and Peru.
Prices for Netflix have crept up steadily over time, while other streaming services come in at lower prices. Bundle deals from their competition and a more separated library of materials has made Netflix, and their competitors, create more original content, which comes with a price. The cost of bringing content, and more options for viewers to pick instead of Netflix, or in addition to, have contributed to the company’s “soft quarter,” as Neumann called it.