Netflix subscriber loss: Elon Musk says 'woke mind virus' makes it unwatchable

Streaming giant Netflix lost 200,000 subscribers in the first three months of 2022, marking its first decline in paid members in over a decade.

Reacting to the news, Elon Musk, the world's richest person who is also planning a hostile takeover of Twitter, said the "woke mind virus" is making Netflix unwatchable. "Can they please just make sci-fi/fantasy at least *mostly* about sci-fi/fantasy?" he tweeted.

Netflix lost a quarter of its value as its stock tanked 25% in extended hours on Tuesday after the earnings report was released.

"Our revenue growth has slowed considerably," the company said in a letter to shareholders. "Our relatively high household penetration - when including the large number of households sharing accounts - combined with competition, is creating revenue growth headwinds."

In addition to its 222 million paying households, the company estimates that Netflix is being shared with over 100 million additional households.

The streaming service further expects a loss of 2 million paid subscribers in the April-June quarter.

The suspension of Netflix in Russia and winding-down of all Russian paid memberships resulted in a loss of 700,000 paid members during the first quarter, the company said, adding that it would have seen 500,000 net additions during the most recent quarter without this impact.

Netflix had earlier forecast an addition of 2.5 million paid subscribers during the first quarter. It added 4 million paid users in the same period a year ago.

Netflix said macro factors, including sluggish economic growth, increasing inflation, geopolitical events such as Russia-Ukraine war, and continued disruption from Covid-19 are likely having an impact on its growth.

Netflix co-founder and CEO Reed Hastings said the company is exploring a lower-priced, ad-supported version to boost its subscriber base. "Those who have followed Netflix know that I've been against the complexity of advertising, and a big fan of the simplicity of subscription," said Hastings. "But, as much as I'm a fan of that, I'm a bigger fan of consumer choice."

The streaming service said it is making good progress in the Asia-Pacific region where it is seeing "nice growth" in a variety of markets including Japan, India, Philippines, Thailand and Taiwan. "Over the longer term, much of our growth will come from outside the U.S.," it said.

In an earnings conference call on January 20, co-founder Hastings had said that Netflix hasn't made much headway in India, a country from where it's eyeing its next 100 million subscribers. "In every other major market, we've got the flywheel spinning. It frustrates us that we haven't been as successful in India yet," he had said.

The Los Gatos, California-based streaming major had slashed its prices in India in December last year.

Netflix said the Covid-19 pandemic clouded the picture by significantly increasing its growth in 2020, leading the streaming giant to believe that most of its slowing growth in 2021 was due to the Covid-19 pull forward.