Netflix’s decade-long streak of subscriber growth came to a stop in the first quarter, and the streaming giant conceded that things were only going to get worse in the second, causing its stock to drop.
Between January and March, the business’s membership numbers fell by roughly 200,000, and the company surprised investors by expecting the figure would rise to over 2 million in the current quarter.
Netflix attributed the sharp drop to saturation in its most important areas. It also recognized the influence of streaming services offered by major media companies like Disney, Warner Bros. Discovery, and Paramount.
Price rises in the US and Canada cost the company about 600,000 subscribers although it said the strategy had been “significantly revenue positive”. It also quit streaming in Russia after the invasion of Ukraine, costing it about 700,000 subscribers.
Netflix said it would try to address the slowing growth by improving the “quality of our programming” and by seeking to charge some of the 100mn households that share other users’ accounts.
It also planned to launch an ad-supported streaming service — an idea that he had long resisted, co-chief executive Reed Hastings said.