Netflix released its quarterly report yesterday and the January-March numbers didn’t look exciting. The streaming company expected to add 2.5 million subscribers, but instead lost 200,000 for the first three months of the calendar year.
The number filled the company’s shares, which lost more than 25% in after-hour trading
Reed Hastings, CEO of Netflix, said he is personally opposed to “the complexity of advertising” and prefers “the simplicity of the subscription”, but is also “a fan of consumer choice”, which means the company is considering the introducing a cheaper level with ads.
In the same period January-March of 2021, Netflix had an influx of 4 million paying users, but now it has only registered 0.5 million. However, since the platform withdrew from Russia, it has lost 700,000 users, resulting in a net loss of customers, the first time since October 2011.
The main challenge remains the phased acquisition, but Reuters reminded that 100 million households in the United States are already paying for Netflix and the company is expected to seek expansion to other regions. There is also stiff competition from rivals such as HBO Max and Disney.
All the major streaming services are expecting slower growth, with Netflix in particular forecasting 2 million more people to stop paying in the next three months, despite the return of big names like “Stranger Things” and “Ozark”.
These numbers resulted in a shocking drop in value, with Netflix shares dropping 26% after Tuesday’s bell, wiping out $ 40 billion in value. The downdraft also captured competitors: Roku fell 6%, Walt Disney reported a 5% decline, while Warner Bros Discovery fell 3.5%. Since Netflix said it expected weak subscriber growth in January, it has lost half its value.
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