By Joshua Manning • 20 April 2022 • 17:59
Netflix shares plummet nearly 40% after subscriber numbers plunge for the first time in a decade
Netflix shares plummeted more than 37% on Wall Street on Wednesday 20, April, after the streaming entertainment platform confirmed the loss of 200,000 paying subscribers in the first quarter of 2022 and anticipated a drop of another 2 million subscribers in the second quarter. This is the first subscriber decline in a decade, as reported by ElMundo.
In the first three months of 2022, Netflix’s worldwide subscriber base sat at 221.64 million, up 14 million paying users or 6.7% from the first quarter of 2021, but down 200,000 subscribers when compared to the fourth quarter of last year, its first decline in a decade.
Netflix stated that its first-quarter results reflect the impact of the suspension of its service in Russia and the liquidation of all Russian paying accounts, which resulted in the loss of 700,000 subscribers, without which the platform would have increased its subscriber numbers by half a million.
Despite this loss of subscribers, the company’s revenue in the first quarter increased by 9.8% to 7.293 million euros and the multinational is confident that between April and June turnover will grow by 9.7% year-on-year to 7.464 million euros.
Netflix co-CEO Reed Hastings admitted during a conference with analysts that the company is studying the launch of a lower-cost plan that would include the viewing of advertisements. “It’s not a short-term solution, because once you start offering a lower-priced plan with ads as an option, some consumers take it up. And we have a large installed base that is probably very happy where they are,” the executive stated, stressing that, in terms of earnings potential, the online advertising market has moved on”, stated Hastings.
“We’re probably not that far along, but no, I think it’s pretty clear that it’s working for Hulu. Disney is doing it. HBO did it. I don’t think we have much doubt that it’s working,” Hastings added. “So I think we’ll actually go in,” he said, clarifying that users who prefer to enjoy the service without ads will still be able to do so, while paying a lower price for ad-free viewing will also be possible.”
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Originally from the UK, Joshua is based on the Costa Blanca and is a web reporter for the Euro Weekly News covering international and Spanish national news. Got a news story you want to share? Then get in touch at [email protected]
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