Netflix shares, already down more than 40 per cent this year, tumbled as much as 24 per cent to US $265.11 in after\u002Dhours trading
The streaming service lost 200,000 customers in the first quarter, according to a statement Tuesday, the first time it has shed subscribers since 2011. Netflix also projects it will lose another two million customers in the current second quarter, setting up its worst year ever as a public company.
Netflix management pointed to four causes, including the prevalence of password sharing and growing competition. The company said there are 100 million households that use its service and don’t pay for it, on top of its 221.6 million subscribers. The company is experimenting with ways to sign up those viewers.Article content
The results will have ramifications for all of the big entertainment companies. After watching millions of customers abandon pay TV for streaming, U.S. entertainment giants have merged and restructured to compete with Netflix in streaming. Investors encouraged this strategic shift, buying shares in companies like Walt Disney Co. that demonstrated a commitment to streaming.
“The big Covid boost to streaming obscured the picture until recently,” the company wrote in its letter.
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