Shock on Wall Street as 200,000 subscribers quit Netflix: Shares dive 25% after grim update
Netflix shares tumbled more than 25 per cent last night after it revealed it lost 200,000 subscribers in the first three months of the year.
In a sign the explosion in streaming has come to a juddering halt, the company said its user base shrank for the first time in more than a decade. Total subscribers fell in the first quarter of the year from 221.8million to 221.6million.
Netflix also warned it will lose another 2m subscribers in the three months to the end of June.
The grim update – which was far worse than expected – stunned Wall Street.
The streaming platform has produced recent hits including political drama Anatomy of a Scandal, starring Naomi Scott, Sienna Miller and Michelle Dockery
Shares in the company, which were already down more than 40 per cent this year, plunged another 25 per cent.
The latest slump wiped at least £75billion from the value of the California-based company and means the shares are now down more than 50 per cent this year.
The shocking results show the tech giant has run into a wall after a decade of meteoric growth which shook Hollywood to its core.
It recently saw a pandemic-fuelled boom as subscribers were kept indoors through lockdowns and turned to the streaming giants for entertainment.
The platform’s decision to pull out of Russia cost it 700,000 subscribers. It has also been contending with increasingly fierce competition from streaming rivals as well as the growing price squeeze on consumers.
The streaming platform has produced recent hits including political drama Anatomy of a Scandal, starring Naomi Scott, Sienna Miller and Michelle Dockery.
Sales in the period were £6billion, just 9.8 per cent up from £5.5billion a year earlier. While profit slipped to £1.2billion, down from £1.3billion a year earlier.
Netflix said the Covid boom ‘obscured the picture’ and blamed intense competition and the large number of households sharing accounts for the fall.
In a letter to shareholders yesterday the company said: ‘Our revenue growth has slowed considerably as our results and forecast show.’
The slowdown comes as streaming giants have become the latest victim of the UK’s cost of living crisis as half a million households have cancelled subscriptions to save cash.
The streaming boom in the UK has run out of steam as customers find ways to rein in spending.
The number of homes with services including Netflix, Amazon and Disney+ fell in the first three months of the year as families tightened their belts.
UK households paying for at least one of the services had been increasing for almost the entire last decade. But that number fell by 215,000 between January and March as soaring energy bills and inflation began to bite. It is only the second quarterly fall on record.
Data firm Kantar said 1.5m UK households cancelled streaming services over the three months, with more than 500,000 of those citing ‘money saving’. Meanwhile just 3 per cent of homes subscribed to a new service, down from 4.2 per cent in the same period a year earlier.
Kantar Worldpanel’s global insight director Dominic Sunnebo said: ‘With many streaming services having witnessed significant revenue growth during the height of Covid, this moment will be sobering.
‘The evidence from these findings suggests that British households are now proactively looking for ways to save, and the subscription video-on-demand market is already seeing the effects of this.’