Last month, after Netflix revealed its first quarterly drop in new user subscriptions, the streaming industry plunged into crisis and turmoil.
Concerns have been raised about the future of a multi-billion dollar industry, and investors have questioned: Is the increase in the number of platforms directly proportional to profitability?
Netflix Stops Growing Growth
Last October, Netflix, with its hit series “Stranger Things,” emerged as a phenomenon. Holding $300 billion in market capitalization, this Special Database giant leads the list of big players in the industry, surpassing Disney with only $290 billion.
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Still Netflix stock is down 67% year to-date so far this year. The main reason came from the trading session in the red in April, after the streaming giant reported a decrease in the number of registered users.
They see the pressure of inflation in all sorts of expenses, and cutting back on streaming services is a quick way to save money,” said Russ Mold, chief investment officer at AJ Bell.
This mirror affected a host of other media and streaming companies, including Disney, which has the worst-performing stock in the Dow Jones Industrial Average 2022.
Customers Leave the Netflix Service Too Easily
The fact that a series of hit series like “The Book of Boba Fett” and “Moon Knight” helped Disney + “pocket” 20 million new registrations does not seem to be enough to make the situation better.
According to CNBC, Discovery media company also added 12.8 million new subscribers in the past year, bringing the total number of accounts CMB Directory owned to 76.8 million globally. Even so, Discovery stock is still down more than 20% since it began trading in April, following its merger with Warner Media.
In the past, the formula for the success of a live-streaming company seemed simple: new subscribers increase, shares rise.
However, after Netflix’s revenue decline, CEOs had to consider their next steps more carefully.
