Netflix stock fell by a third on Wall Street, or more than $40 billion.
The stock was worth $218, down 37.24%, around 10:20 a.m. in New York.
This is a real setback for this company that expected to gain 2.5 million additional subscribers. The numbers are catastrophic: the streaming giant, for the first time in 10 years, has lost subscribers.
This decline stems, among other things, from Netflix’s decision to withdraw from Russia in protest of the Russian military’s invasion of Ukraine, which resulted in the loss of 700,000 subscribers.
It could lose about 2 million additional subscribers in the current quarter (April to June).
Low cost subscription and advertising?
To deal with this fall, the company hinted on Tuesday that it intends to make changes it has long resisted.
She now wants to reduce password sharing and create a low-cost, ad-supported subscription.
Thus subscribing to the platform can become cheaper if ads are accepted there.
But the company is not providing details at this time about how the ad-supported category of service will work or how much it will cost.
The lockdowns, which kept many viewers in front of their screens during the pandemic, have been lifted as other hardcore players like Apple and Disney enter the scene, eroding Netflix’s broad audience significantly.
The streaming pioneer had already seen its customer base decline, in 2011 it announced that it would make its new streaming service chargeable, which then came free with the traditional DVD-by-mail service.
In the months following that change, Netflix lost 800,000 subscribers, and its CEO, Reed Hastings, was forced to issue an apology.
Ryan MacDonald is a contributor at Vaughantoday.ca, covering a wide range of topics including local news, politics, business, technology, sports, entertainment, and lifestyle. He focuses on clear, accurate reporting and delivering useful information that helps readers stay informed about current events and community developments. Ryan is committed to presenting stories in a balanced and accessible way, highlighting issues, trends, and updates that matter most to readers in Vaughan and across Canada.