Netflix suffered the first loss in worldwide subscribers in its history, leading to a massive sell-off of its shares. The streaming company lost 200,000 subscribers during the January-March period, according to a quarterly report, dragging their stock down 23%.
The decline came after the firm raised prices in key markets including the U.S. and UK, while pulling out of Russia.
The company, that has long been opposed to adding commercials or promotions to the platform, now thinks it makes a lot of sense to offer customers a cheaper option.
“Those who have followed Netflix know that I have been against the complexity of advertising and a big fan of the simplicity of subscription,” co-CEO Reed Hastings said during the company’s prerecorded conference call. “But as much as I am a fan of that, I am a bigger fan of consumer choice, and allowing consumers who would like to have a lower price and are advertising-tolerant to get what they want makes a lot of sense.”
This was the first time Netflix’s worldwide subscribers have contracted, although in 2019 the streaming service saw a decline in U.S. subscribers. With over 220 million subscribers Netflix warned that more losses are coming.
After reports that the company has over 100 million global households using shared password, the company also said it will start to crack down on account sharing to increase its number of subscribers.