Welcome to the latest episode of Talking Trends, the weekly podcast from Music Business Worldwide (MBW) – where we go deep behind the headlines of news stories affecting the entertainment industry. Talking Trends is supported by Voly Music.
On this episode, MBW founder Tim Ingham analyzes the news the Netflix's global subscriber base fell quarter-on-quarter in Q1 2022 – and ponders whether leading music streaming services like Spotify will soon face similar headwinds.
Netflix lost 200,000 subscribers in Q1, meaning that more people unsubscribed from the platform in the quarter than actually subscribed to it.
Ingham sifts through Netflix's new letter to shareholders, in which the video streamer explains why it thinks these subscribers left its platform.
Says Ingham: "One very convincing take on Netflix's poor Q1 results is that the [macro economic] sluggish economic growth and increasing inflation [in the world today] are actually the only factors that really matter here.
"Inflation in the US, for one thing, hit a very scary 8.5% in March, according to the Consumer Price Index.
"That 8.5% was the highest US inflation rate we've seen since 1981: that's over 40 years ago. This is once in a generation stuff.
"So it's no great shock that people are starting to worry very seriously about their cost of living, versus the salary they have dropping into their bank account every fortnight or month.
"And they're making sensible cutbacks of goods and services they can ultimately live without."