Streaming service Netflix lost 200,000 subscribers worldwide in the first three months of the year compared to the end of 2021. It was the first time since 2011 that Netflix lost users. The stock lost more than 24 percent after hours.
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The streaming service Netflix had expected 2.5 million new users, but instead the service lost subscribers. The total number of subscribers is now 221.64 million. The market had expected a correction after the increase in subscribers due to corona, but it was larger than expected.
Netflix attributes the decline mainly to the difficulties in recruiting new users in all regions of the world, but also to the fact that the service is no longer available in Russia.
The discontinuation of the service in Russia and the gradual decline of Russian paying subscribers resulted in a net loss of 700,000 subscriptions. Without that impact, we would have had 500,000 new subscribers,” the company said in its quarterly results. Netflix expects to lose another 2 million users in the second quarter.
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Falling subscribers and weak growth prospects will force Netflix to rely more on secondary services such as video games and derivatives to grow its revenues, said eMarketer analyst Ross Benes.
It’s not just Netflix’s share that suffered from the bad news. The streaming service Roku (-8.3 percent) and Walt Disney Co (Disney+, -5.3 percent) also lost on the stock market, as did media companies Warner Bros Discovery Inc., Paramount Global and Spotify Technology SA.
Netflix posted revenue of $7.9 billion in the first quarter, almost 10 percent more than a year earlier, mainly due to the year-over-year increase in subscribers (+6.7 percent) and the rise in fees. Net profit at $1.6 billion is lower than in the first half of last year (1.7 billion)
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