Netflix suffered its first subscriber loss in more than a decade, causing its shares to plunge 25 per cent in extended trading amid concerns that the pioneering streaming service may have already seen its best days.
The company's customer base fell by 200,000 subscribers during the January-March period, according to its quarterly earnings report released Tuesday It's the first time that Netflix's subscribers have fallen since the streaming service became available throughout most of the world outside of China six years ago. The drop this year stemmed in part from Netflix's decision to withdraw from Russia to protest the war against Ukraine, resulting in a loss of 700,00 subscribers.
Netflix also lost 800,000 subscribers in 2011 after it unveiled plans to begin charging separately for its then-nascent streaming service, which had been bundled for free with its traditional DVD-by-mail service. The customer backlash to that move elicited an apology from Netflix CEO Reed Hastings for botching the execution of the spin-off.But the latest subscriber loss was far worse than a forecast by Netflix management for a conservative gain of 2.5 million subscribers.
Netflix has previously predicted that it will regain its momentum, but is now starting to acknowledge that needs to take action. Among other things, Netflix signaled that it will likely crack down on the sharing of subscriber passwords that has enabled multiple households to access its service from a single account.
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