Netflix reported its first subscriber loss in more than ten years on Tuesday, causing its shares to fall more than 20 percent.
The streaming giant reported a drop of 200,000 subscribers during the first quarter of 2022. The company last reported a loss in subscribers in October 2011, according to Reuters.
The company’s stock saw a 23 percent dive in after-market trading, which erased $30 billion in market value, the outlet noted.
The company said it lost 200,000 subscribers in its first quarter, falling well short of its forecast of adding 2.5 million subscribers. Suspending service in Russia after the Ukraine invasion took a toll, resulting in the loss of 700,000 members.
Wall Street sent Netflix’s stock tumbling 26% after the bell on Tuesday and erased about $40 billion of its stock market value. Since it warned in January of weak subscriber growth, the company has lost nearly half of its value.
The lagging subscriber growth is prompting Netflix to contemplate offering a lower-priced version of the service with advertising, citing the success of similar offerings from rivals HBO Max and Disney+.
“Those who have followed Netflix know that I’ve been against the complexity of advertising, and a big fan of the simplicity of subscription,” said Netflix CEO Reed Hastings. “But, as much as I’m a fan of that, I’m a bigger fan of consumer choice.”
(With inputs from agencies)