- Streaming company Netflix sees a 200,000 subscriber drop in its first quarter, its first decline in a decade
- The company said this result fell below its forecast of adding 2.5 million subscribers
- This news made Netflix shares stumble 26 per cent on Tuesday and erased about US$40 billion (A$54 billion) off its stock market value
- Netflix said it is looking into offering a lower-priced version of the service with advertising, like fellow competitors HBO Max and Disney+
Netflix have lost 200,000 subscribers in its first quarter, its first decline in 10 years, far below its forecast of adding 2.5 million subscribers.
The streaming giant said it lost 700,000 members after it suspended its service in Russia, following the Ukraine invasion.
This news made Netflix shares stumble 26 per cent on Tuesday and erased about US$40 billion (A$54 billion) off its stock market value.
If the stock drop continues into Wednesday, Netflix shares will have lost more than half of its value since the start of the year.
Now, Netflix said it is looking into offering a lower-priced version of the service with advertising, like fellow competitors HBO Max and Disney+.
This setback follows the company’s addition of 18.2 million subscribers in 2021, its weakest annual growth since 2016.
“Our revenue growth has slowed considerably as our results and forecast below show. Streaming is winning over linear, as we predicted, and Netflix titles are very popular globally,” the company said in a letter to its shareholders.
“However, our relatively high household penetration – when including the large number of households sharing accounts – combined with competition, is creating revenue growth headwinds. The big COVID boost to streaming obscured the picture until recently.”
“While we work to reaccelerate our revenue growth – through improvements to our service and more effective monetisation of multi-household sharing – we’ll be holding our operating margin at around 20 per cent,” Netflix added.