Shares of Netflix fell more than 20% on Tuesday after it warned its decade-long period of subscriber growth was over in the first quarter and acknowledged that it was becoming “difficult to grow up”. more members” in many markets.
The streaming Pioneer also said the number of subscribers will drop by another 2 million in the current quarter, to about 219.6 million, after falling by about 200,000 in the first quarter. Investors are expected to add 2.6 million subscribers.
Netflix The blame for the slowdown is in part on signs of saturation in its key markets. But it also acknowledged the impact of increased competition from streaming services launched by traditional media conglomerates like Disney, Warner Bros Discovery and Paramount.
“Our relatively high level of household penetration – when including large numbers of account-sharing households – combined with competition, is creating revenue growth whirlwinds,” it said. said in a statement.
Netflix admits that its revenue growth has “slowed down significantly”. In the first quarter, Netflix’s revenue rose 10% to $7.8 billion, below Wall Street expectations of $7.9 billion. Earnings of $3.53 a share far exceeded expectations.
The company said it will try to stimulate growth by improving “the quality of our programs and recommendations” and by finding a way to charge some of the 100 million households that share its resources. account of another user.
Some analysts are looking to Netflix to get a boost this spring from new episodes of hit series like Strange things and Ozark.
It also emphasizes the importance of international growth. “While hundreds of millions of homes pay for Netflix, more than half of the world’s broadband homes are unpaid – representing huge growth potential going forward,” the company said.
Netflix has raised prices this year in the US and Canada, costing about 600,000 subscribers but “remarkably positive revenue,” the company said. It also stopped streaming in Russia after the invasion of Ukraine, costing around 700,000 subscribers.
It’s the second time Netflix has surprised investors this year, after rocking the market with forecasts that subscriber growth would slow significantly in 2022. down 42% this year.
