On Wall Street, the action of the streaming giant consequently fell by more than 24% on Tuesday.
Netflix lost 200,000 subscribers worldwide in the first quarter, compared to the end of 2021, a first for more than ten years, and its action consequently tumbled by more than 24% in electronic exchanges after the close of Wall Street on Tuesday.
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The streaming giant explained that this drop was mainly linked to the difficulty of acquiring new subscribers in all regions of the world, but also to the suspension of the service in Russia. The industry pioneer had inflated numbers during the Covid-19 pandemic. The market was expecting a correction but not as strong.
Declining net profit
Netflix had expected to gain an additional 2.5 million subscribers – and analysts were expecting even more – but instead lost some, bringing its total down to 221.64 million subscriptions. “The suspension of our service in Russia and the gradual decrease in the number of Russian paying subscribers has resulted in a net loss of 700,000 subscriptions. Without this impact, we would have had 500,000 additional subscriptions. compared to the last quarter, specified the Californian company in its press release.
It achieved $7.9 billion in revenue from January to March, nearly 10% more than a year ago, thanks in particular to the increase in the number of subscribers over a year (+ 6.7%) and the increase in its prices. But it generated 1.6 billion in net profit, less than the 1.7 billion in the first quarter of 2021. “Netflix’s loss of subscribers is very telling for a company that has been steadily gaining subscribers for an entire decade”reacted Ross Benes, analyst at eMarketer. “With declining subscriptions and weak growth prospects, Netflix will have to rely more on secondary branches, such as video games or derivative products to try to grow its revenues”he added.