Netflix subscriber woes could be a warning for the industry

Business

(NewsNation) — Netflix’s subscriber base fell by 200,000 subscribers during the January-March period, according to its quarterly earnings report. Shares have since plunged 25% in extended trading.

Now, experts say the latest customer drop could be a warning for the streaming industry.

“Legendary investor Bill Ackman came out and said that he was liquidating his position and the company took a $14 million loss. We have one of the most sophisticated and successful investors on Wall Street saying he doesn’t feel confident about the future of the company,” New York Post reporter Lydia Moynihan said on “Morning in America.”

She says investors are looking at the company’s current situation as a “valuation reset in a post-pandemic world.”

Moynihan said the streaming giant’s success in recent years has been contingent on the COVID-19 pandemic.

“If there were options for people to leave their homes, I don’t think you would have seen just the virality of some of these shows that gained popularity during the pandemic,” she said.

Now, the company is weighing options to get profits back on track.

“They’re looking at a number of ways that they can juice their profits. They’re looking at a potential ads, ramping up ad revenues and having different tiers of subscriptions. Another piece they’re looking at is cracking down on login sharing, which is costing them potentially hundreds of millions of dollars,” Moynihan said.

Moynihan says people are leaving subscription services across the board.

“Netflix is the benchmark for streaming,” and the fact that people are leaving says a lot, she said.

“They’re leaving other subscription services in droves. There’s just not the appetite for them that there once was,” Moynihan said.

“The whole notion of streaming at first was that you’d be able to cut the cord and save money,” she adds.

Earlier this year, Netflix raised monthly subscription prices in the U.S. for all plans in order for the service to “continue to offer a wide variety of quality entertainment options.”

© 1998 - 2022 Nexstar Media Inc. | All Rights Reserved.

Trending on NewsNation

Elections 2022

More Elections 2022