Last week, Netflix released its quarterly results for January-March, and they seemed to be disappointing. For the first three months of the year, the streaming firm projected to gain 2.5 million customers but instead lost 200,000.
As a result, the shares of the firm fell by almost 25% in after-hours trading.
“The intricacy of advertising” and “the simplicity of subscription” are two things Reed Hastings, Netflix CEO, dislikes, but he is “a lover of customer choice,” which means the business is contemplating introducing a lower-cost tier with advertisements.
Netflix had 4 million paying subscribers at the same time period in 2021, but today it only has 0.5 million. A nett loss of clients has occurred for the first time in more than two years since a Russian exodus of 700,000 people.
However, Reuters reminded the corporation that 100 million US households already pay Netflix a subscription fee, and that it should try to expand into other areas. Competitors like HBO Max and Disney are also a serious threat.
Despite the comeback of popular shows like “Stranger Things” and “Ozark,” all major streaming services foresee slower growth in the coming months. Netflix, in particular, expects 2 million more subscribers to cease paying over the next three months.
Netflix’s stock price dropped by 26% after the bell on Tuesday, wiping out $40 billion in market capitalisation as a consequence of these figures. Customers of Roku’s rivals have also been hit by the downdraft, with Walt Disney reporting a 5 percent drop and Warner Bros Discovery falling by 3.5%. Netflix has lost half of its value since it predicted sluggish subscriber growth in January.