Following a 35% fall after reports on the subscribers’ loss, Netflix is now down 27.15% in the pre-market trading.
Shares of American subscription streaming service and production company Netflix Inc (NASDAQ: NFLX) plunged more than 27% after losing about 200,000 subscribers in Q1. On the 19th of April, Netflix announced the subscriber loss for Q1, which resulted in its stock falling in extended trading hours. This came as a significant decrease for the company as it has not reported a fall in paid subscribers in more than 10 years. The last time the streaming service providers announced losses in their subscribers was in 2011.
Netflix Reports Loss of Subscribers for the First Time in a Decade
In addition to the loss of subscribers in Q1, Netflix is also concerned that there may be future tumbles. The company expected to see an addition of 2.5 million net subscribers in Q1. Meanwhile, analysts’ prediction was around 2.7 million. Hopes were high as Netflix added 3.98 million paid users in Q1 2021. However, the first quarter of 2022 proved otherwise, and the production company anticipates further declines. For Q2, the company expects to see a 2 million loss in global paid subscribers. Explaining the unpleasant situation to shareholders, Netflix wrote in a letter:
“Our revenue growth has slowed considerably. Streaming is winning over linear, as we predicted and Netflix titles are very popular globally. However, our relatively high household penetration – when including the large number of households sharing accounts – combined with competition, is creating revenue growth headwinds.”
Netflix’s competitors, such as Disney+, Apple TV, HBO Max, and Peacock, also contributed to the recent downswing. The company acknowledged that more streaming services had been launched and now competes with them. Netflix has been struggling with slower user growth over the past months due to the Russia-Ukraine war and the negative effect of the coronavirus pandemic. The company stopped its service in Russia in March after the country invaded Ukraine. Suspending its service in Russia resulted in the removal of 700,000 net paid subscribers during the first quarter.
With heightened competition from its competitors and a price hike, Netflix saw a loss of net 600,000 paid subscribers in the US and Canada during the Q1. Notably, the American company announced an increase in its prices for its North America subscribers.
Netflix Stock Performance
Following a 35% fall after reports on the subscribers’ loss, Netflix is now down 27.15% in the pre-market trading. Data by MarketWatch shows that the company has performed poorly over the past year. Shedding more than 3% in a year, NFLX has dropped 42.13% since the beginning of January. Similarly, the company diminished by over 32% in the last three months and 6.91% over the past month. In the last five days, Netflix has plummeted nearly 0.52%.
After Netflix updated stakeholders on its Q1 performance, other stream stocks like Roku (NASDAQ: ROKU), Disney (NYSE: DIS), and Spotify (NYSE: SPOT) also recorded declines in the after-hours market.
Ibukun is a crypto/finance writer interested in passing relevant information, using non-complex words to reach all kinds of audience.
Apart from writing, she likes to see movies, cook, and explore restaurants in the city of Lagos, where she resides.
Subscribe to our telegram channel. Join
Ecosystem
Research
News Network
About