Netflix Inc. (NASDAQ: NFLX) has issued its first-quarter report for 2022. The corporation announced a loss in subscribers for the first time in 10 years, and the news was extensively publicized, with the incident being described as “shocking” by the media.
The number of Netflix customers has decreased by roughly 200,000, according to the data. Against the backdrop of this statistic, a large number of comments and news stories with extreme viewpoints such as “the loss of the popularity of the streaming service” resulted in a significant reduction in NFLX quotations.
The subscriber base’s weak dynamics, on the other hand, were predicted. Now is a tough time to make a comparison with the unusually high rates of the previous two years, when individuals spent a lot of time at home owing to the epidemic. Furthermore, the COVID-19 situation has caused a production stop on a number of episodes, leaving Netflix with a content shortfall. The loss of 700,000 customers from Russia was another reason.
At the same time, the video streaming market in the United States is approaching saturation, with around 75 million Netflix members accounting for 60% of all homes.
In this context, it was difficult for Netflix to sustain its strong pace, which was notably predicted on Wall Street: the company gained around 2.5 million customers in the current quarter. Netflix, on the other hand, may lose even more customers in the second quarter.
At the same time, Netflix increased revenue in the first quarter to $ 7.87 billion, up from $ 7.16 billion the previous year. Earnings per share dropped to $ 3.53 ($ 3.75 in Q1 2021).
Netflix has enough money to keep making content and launching new ventures. It will take time and the successful advertising of new films and television programs to re-establish the audience. Netflix has the potential to handle these problems because it is a prominent developer of Internet TV programming.