The Netflix company on Tuesday reported its first drop in subscriber numbers since 2011.
The company received new subscribers since the onset of the covid 19 pandemic which has kept it on top.
Before, the immediate result was a roughly 25% plunge in its shares in after-hours trading, a loss of nearly $40 billion in market value for a stock that was already down 42% this year.
Netflix blames not only the post-Covid slowdown but macroeconomic factors, the pace of technological change, and competition from Amazon.com and others.
The 222 million subscribers for the first quarter would have been slightly up on the prior period but for 700,000 accounts Netflix wound down in Russia. But the company co-led by Reed Hastings and Ted Sarandos is forecasting a decline in the current quarter, too.
The company is now targeting households using other subscribers’ passwords. The company reckons there are more than 100 million such freeloaders, and it wants them to pay. That could improve earnings but annoy users. Continuously reinventing itself has been a Netflix strength, but it’s not easy.
During the company’s launch in Kenya 6 years ago, the CEO Reed Hastings affirmed to bring more in 20 years, with the drop in the number of subscribers will the streaming giant execute its plans?.
BY REUTERS
