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Netflix Loses Paid Users For the First Time in a Decade
Like most first-movers, it’s now facing rising competition for a flat market
Shareholders expected Netflix to hit subscriber growth of 2.7 million in Q1 of 2022. So, when the company announced that it had lost 200,000 subscribers — the first decline in paid users since late 2011 — and warned of further problems ahead, the feeling in the room must have been less ‘Netflix and Chill,’ and more ‘ Netflix and OMFG it’s over.’
In startling contrast to recent fortunes, the company said it expects to lose a further 2 million subscribers in the next quarter. For context, Netflix added 3.98 million paid users during the same period a year ago. In a letter to shareholders, the company played the role of Captain Obvious, stating, “Our revenue growth has slowed considerably,” adding that “we’re not growing revenue as fast as we’d like.”
In an industry where growth is the only metric considered, this is as a big red flag as it gets.
When the news broke, Netflix’s share price tanked as much as 25% in after-hours trading, compounding the stock’s decline over the past six months. The stock price was sitting at an all-time high of $690 in November 2021, but it has been sliced in half on the back of several disappointing quarters.
