Those who believe the financial situation at Netflix could get no worse should prepare for another rude piece of news. New research shows the service continues to lose subscribers. According to a report from Antenna, published by The Information, “New data show that people who have been subscribers to Netflix for more than three years accounted for a significantly greater share of cancellations in the first quarter than they did two years earlier.”
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Netflix already has been hammered by the impression that its growth may have ended. While it is one of the largest streaming services in the world, it has powerful competition, particularly from Amazon and Disney. Newer competition from the likes of Apple and HBO are hungry for market share. The average household has four streaming services. With a possible recession around the corner and the reopening of movie theaters, that may shrink.
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Netflix has 222 million subscribers, but that number may fall during the quarter, based on its own forecasts. As the company released its most recent earnings, management wrote, “Our plan is to reaccelerate our viewing and revenue growth by continuing to improve all aspects of Netflix – in particular the quality of our programming and recommendations, which is what our members value most.” Every streaming service has similar goals.
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It would appear that Netflix stock could drop no further. Once a darling of Wall Street, Netflix shares have declined over 75% this year. As the tech sell-off steepens, the stock could continue to fall at an unimaginable rate.
Netflix Investors Brace for Another Sell-Off
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McIntyre has been the CEO of FutureSource, a provider of trading terminals and news to commodities and futures traders. He was president of Switchboard, the online phone directory company. He served as chairman and CEO of On2 Technologies, the video compression company that provided video compression software for Adobe’s Flash. Google bought On2 in 2009.
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