Netflix saw its first subscriber loss in more than a decade, sending its stock down 25% in extended trading amid fears that the pioneering streaming service has passed its prime.
According to the company's quarterly earnings report released Tuesday, its client base declined by 200,000 customers between January and March.
It's the first time Netflix's member base has declined since the streaming service became available in most of the world save China six years ago. This year's reduction was caused in part by Netflix's decision to depart from Russia in protest of the war against Ukraine, which resulted in a loss of 700,000 customers.
Netflix admitted the depth of its troubles by estimating a 2 million subscriber loss during the April-June timeframe.
If the price declines further into Wednesday's regular trading day, Netflix shares would have lost more than half of their value this year, wiping out around $150 billion in shareholder wealth in less than four months.
Netflix is seeking to turn the tide by taking moves it previously opposed, such as limiting account sharing and providing a lower-priced – and ad-supported – version of the service.
According to Aptus Capital Advisors analyst David Wagner, Netflix is now facing a formidable battle. "They're in no-land," man's Wagner said in a research note published Tuesday.
Netflix suffered its greatest setback since losing 800,000 customers in 2011 as a result of plans to charge separately for its then-nascent streaming service, which had previously been bundled for free with its traditional DVD-by-mail service. The customer outrage prompted Netflix CEO Reed Hastings to apologise for botching the spin-execution. off's
The most recent subscriber loss was significantly worse than a cautious increase of 2.5 million users predicted by Netflix management. The announcement adds to the streaming company's woes, which have been increasing since a flood of signups from a captive audience during the pandemic began to slow.
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