There is a sudden fall in numbers of Netflix subscribers for the first time in a decade. Netflix recently reported a 200,000-subscriber loss since the beginning of the year. They attribute this to password sharing, increased competition, and their exit from the Russian market. In after-hours trading, the company’s stock dropped by more than 25% due to the news.
Netflix subscribers growth has been slowing for some time now, after reaching all-time highs at the start of the pandemic. Reports reveals a net loss of 200,000 Netflix subscribers worldwide during the first quarter, the first drop in paid users since October 2011. It also anticipates losing an additional 2 million in the second quarter of this year.
According to the company, the price increase in January is partly to blame, which has lost 600,000 Netflix subscribers in the United States and Canada. With inflation on the rise, it’s no surprise that people are cutting back on non-essential spending.
Netflix suspended its service in Russia last month in response to the invasion of Ukraine. According to today’s earnings report, this has resulted in a loss of approximately 700,000 subscribers.
The streaming landscape is also more competitive than ever, with more entertainment companies launching their services, many of which are cheaper. Disney announced last month that a more affordable tier would be added to their streaming platform later this year.
Netflix had approximately 222 million subscribers at the end of the quarter, indicating that it is still the largest streaming platform. However, they estimate that over 100 million additional households have accounts. They are, without a doubt, looking into ways to mitigate this.
The company initially predicted ending the quarter with an additional 2.5 million subscribers, far fewer than the 4 million it gained in Q1 2021. Following today’s report, Netflix stock dropped by about 25% in after-hours trading.