SAN FRANCISCO (AP) – Netflix has experienced the loss of its first subscriber in more than a decade, leading to a 25% drop in its shares in expanded trade due to concerns that the pioneering streaming service may have seen the its a better day.
According to the quarterly revenue report released on Tuesday, the company’s customer base dropped by 200,000 subscribers between January and March. This is the first time Netflix subscribers have refused since the streaming service became available worldwide outside of China six years ago. This year’s decline was partly due to Netflix’s decision to leave Russia to protest the war against Ukraine, which resulted in the loss of 700,000 subscribers.
Netflix acknowledged that its problems were deeply rooted in its April-June forecast of losing another 2 million subscribers.
If shares continue to fall in Wednesday’s regular trading session, Netflix shares will lose more than half of their value this year – a $ 150 billion shareholder fortune in less than four months.
Netflix hopes to reverse the trend by taking steps it has previously resisted, including blocking account sharing and introducing a low -price, ad -supported version of its service.
David Wagner, analyst at Aptus Capital Advisors, said it is now clear that Netflix faces a major challenge. “I’m in the land of the Arakats,” Wagner wrote in a research note Tuesday.
Netflix received the biggest hit since losing 800,000 subscribers in 2011: the result was a separate start-up fee for its newborn streaming service, packaged for free with the traditional DVD-by-mail service. Customer feedback on the move prompted Netflix CEO Reed Hastings to dismiss the spin-off performance.
The latest loss of subscribers is worse than Netflix management’s forecasts for a conservative 2.5 million subscribers. The news exacerbated the escalating problems for streaming as the proliferation of signatures from captive audiences slowed during the pandemic.
This is the fourth time in the past five quarters that Netflix’s subscriber growth has dropped less than revenue last year, a weakness exacerbated by intense competition from well-funded competitors such as Apple and Walt. Disney.
The recession was followed by the addition of 18.2 million subscribers in 2021, the weakest annual growth since 2016. In contrast to the growth of 36 million subscribers in 2020, when people went home. and hunger for pleasure, which Netflix has been able to do quickly and easily. Provide original programming supplies.
Netflix had previously predicted it would return to momentum, but there were issues on Tuesday that worried it. “COVID has made a lot of noise about how to read the situation,” Hastings said in a video conference discussing the latest issues.
Among other things, Hastings confirmed that Netflix will begin banning subscriber passwords, allowing multiple families to access its service from one account, with changes likely to launch within next year.
In Los Gatos, California, the company estimates that approximately 100 million families worldwide view its services for free using the account of a friend or other family member, including 30 million in the United States and Canada. “This 100+ million households decided to watch Netflix,” Hastings said. “I love the service. We just need to get a little paid for them. “
To stop the practice and get more people to pay their bills, Netflix indicated that it will expand the Quiz introduced in Chile, Peru and Costa Rica last month. This allows subscribers to add to their accounts two people living outside their own family for an additional fee.
Netflix ended in March with 221.6 million subscribers worldwide. The decline in subscribers shook Netflix’s finances in the first quarter, as the company’s revenue dropped 6% year-over-year to $ 1.6 billion, or $ 3.53 per share. Revenue rose 10% year-over-year to nearly $ 7.9 billion.
As the pandemic subsided, people found other things to do and other video streaming services worked hard to attract new viewers to their award-winning program. For example, Apple acquired exclusive streaming rights to CODA, which, along with other films, surpassed Netflix’s “Dog Power” and won an Oscar for Best Picture last month.
Rising inflation over the past year has also reduced household budgets, forcing more consumers to limit spending on discretionary products. Despite this pressure, Netflix prices have recently risen in the US, where it has the highest household penetration and where it has struggled to find more subscribers. In the last quarter, Netflix lost 640,000 subscribers in the U.S. and Canada, forcing management to note that most of its future growth will come from international markets.
Netflix is also trying to give people another reason to subscribe to video games at no extra cost – a feature that started last year.
Source: Huffpost
