Netflix Share Price plunges as the Company records a Drop in Users

On Monday, the popular OTT platform Netflix suffered a massive setback. The streaming giant’s users declined for the first time in the decade. Netflix informed that it lost 200,000 subscribers in the first quarter, which is a huge drop in its subscribers base. As soon as Netflix announced that it had lost 200,000 users, its share price plunged by nearly 26% which eventually wiped about $40 billion from its market value. Netflix gave several reasons behind the decline in its number of customers. It claimed that the decline is due to inflation, increased competition, password sharing, and the Russian-Ukraine Conflict.

Netflix in a shareholder filing stated, “Our revenue growth has slowed considerably. Netflix titles are very popular globally. However, our relatively high household penetration - when including the large number of households sharing accounts - combined with competition, is creating revenue growth headwinds.” In the past ten years, this is the first user decline of the OTT platform. The last time it lost users was in October 2011. Also, the streaming giant expects the decline to continue further as it has predicted a drop of 2 million subscribers for the current quarter.