The air hole is confirmed.

Netflix lost 200,000 subscribers worldwide in the first quarter, compared to the end of 2021, a first in more than a decade that sent shares on Wall Street plummeting on Tuesday.

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 expected a correction, but not as strong.

Its title fell by 25% in electronic trading after the closing of the New York Stock Exchange.

In six months, the drop has now reached 62%.

Or a price divided by 2.6 since November.

Competition and geopolitics

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.

The outlook for the future looks gloomy: Netflix expects a decline of 2 million users in the next quarter.

In all, Netflix made $7.9 billion in revenue from January to March, almost 10% more than a year ago, thanks in particular to the increase in the number of subscribers on 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.

After years of conquering users at high speed, and awards at festivals, the company was joined by strong competitors, like Disney+ and Apple TV+ at the end of 2019 and then HBO Max.

Fight against account sharing

"Netflix's loss of subscribers is very telling for a company that has been steadily gaining subscribers for an entire decade," said eMarketer analyst Ross Benes.

“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.

The fact that many households share their account and the increased competition “create obstacles to our growth.

The take-off of streaming thanks to the Covid had masked the reality until recently, ”said the group.

Who announced at the beginning of March that he was going to conduct tests in South American countries to charge his customers for adding additional profiles to their account.

Sharing passwords between households “affects our ability to invest in quality series and movies for our members,” said Chengyi Long, director of product innovation at Netflix, in a statement.

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