Results for the 1st half of 2022 led the streaming service’s shares to fall 26% in the post-market
Netflix had a drop of 200 thousand subscriptions at the beginning of 2022, according to the fiscal balance for the 1st quarter released this Tuesday (19.Apr.2022). It is the first time since 2011 that the company has registered a reduction in its customer base.
The streaming service also projected a shrinkage of 2 million people for the next swing. Currently, Netflix has 221.6 million subscribers. Here’s the intact (301 KB) of the release.
Market expectations, according to the Bloomberg, was an increase of 2.5 million new customers. The announcement sent the company’s shares down 26% in the aftermarket to $256.
Netflix shares tumble after quarterly results for the 5th time in a row. Since January, the cumulative loss of shares is more than 42%.
In a statement to investors, Netflix justified the results by factors such as the sharing of accounts between users, competition with other platforms – such as Disney + and Hulu – and the inflationary pressure caused by disruptions in the production chain, intensified by the pandemic and the conflict. in Ukraine.
Despite the drop in the number of subscriptions, there was a 10% increase in revenues, which reached US$ 7.87 billion. Netflix’s net income was $1.59 billion.
“Our plan is to resume growth in subscriptions and revenue by improving all aspects of Netflix – in particular, the quality of our programming.,” wrote Netflix CEO Reed Hastings.
To circumvent the downward trend, Hastings said streaming plans to create a lower-price subscription option, subsidized by advertising, and keep the limitation on sharing accounts between people who don’t live in the same house.
The CEO also acknowledged that the reach among the North American audience may be close to the limit.
“In the long term, much of our growth will come from outside the US. Traditionally, US entertainment companies see ‘international’ as an export market for domestic content. But we’ve long noticed that stories can be made anywhere and loved everywhere.”, reads the statement.
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