Woke Netflix recently received a nasty wakeup call, chiefly in the form of a dramatic drop in subscribers. The loss in worldwide subscribers represented the first in Netflix’s history, which resulted in a major sell-off of Netflix shares.
Per official company data, its total customer base fell by 200,000 subscribers during Q1 of 2022, or from January to March. In after-hours trading, Netflix shares dropped by as much as 23 percent.
The drop in subscriptions is all the more stunning considering that Netflix management had forecast a gain of 2.5 million users. The discrepancy illuminates growing troubles at the left-leaning platform, as many users who signed up during lockdowns begin to reduce their usage of the streaming giant’s services.
The drop in worldwide subscriptions is the first in Netflix’s history. However, the streaming giant previously witnessed a decrease in U.S.-based subscribers in 2019. The company is currently anticipating an even bumpier period in Q2, or from April to June.
In after-hours trading, investors promptly panicked, initiating a massive sell-off that sent the stock plunging by 23 percent. Prior to the announcement about the decrease in worldwide users, investors had already started fleeing the stock for greener pastures due to the slowdown in subscriber growth.
If the downturn continues throughout the week, then the total value of Netflix’s stock will have decreased by more than 50 percent this year alone.
The most recent quarterly results from Netflix mark the fourth time in the past five quarters that the subscriber growth at the streaming giant has fallen below the gains associated with the preceding year.
As a result, investors have feared whether or not Netflix can continue to hold its own in a sea of rising competition. Disney and Apple represent particularly formidable competition, particularly given their massive economies of scale and ample access to capital.
Netflix has frequently made headlines for its formal or informal association with woke causes. Transgender employees’ enraged protest over Chris Rock representing one of many leftist incidents at the company.