Sinking Stocks and Losing Subscription, What Happened to Netflix?

In early to mid of March 2022, Netflix’s stock was sunk to its lowest point since the start of the COVID-19 pandemic in March 2020. Investors continuing to sell shares of the streaming service as it faces slower growth on subscriber numbers and more competition from rivals.

Netflix saw significant gains during in 2020 and 2021 as consumers were stuck at home under various restrictions. Netflix’s business boomed in 2020 due to social restrictions that forced people to stay home.

In 2020, Netflix gained more than 36 million subscribers worldwide and in the following year, 2021, the company gained 18.2 million worldwide subscribers. The growth of Netflix in 2021 was the company slowest pace of annual growth in 5 years.The service still boasts nearly 222 million subscribers worldwide, and still maintaining its position as the leader in the industry of streaming service.

Prior to its sinking, the stock of Netflix was pushed past USD 700 on Nov 19, 2021. The value was one of the company’s highest records. It was pushed past USD 700 just two months after Netflix released the worldwide popular ‘Squid Game’, the South Korean action show that became the company’s biggest series ever to the date.

It can be seen that the popularity of ‘Squid Game’ likely contributed to Netflix’s stock surge, but it still couldn’t help the company to avoid the battles among other similar services and furthermore with the lessening restrictions, cinemas also started to attract movie goers.

Through the company Q4 reports, Netflix also stated that the company expects to add 2.5 million new subscribers in the first quarter of 2022. The number is considerably low compared to what analyst expected, a 6.93 million subscribers.

Bloodbath Competition

The economic reopening might not be the only thing that affect Netflix’s growth. Despite the lesser restrictions might have some affects on the company business, the increasing competition also become one important factor that affect company growth.

In the last few years we have seen the surge of streaming services. A lot of major media companies completely building new line of business to capture a bit of Netflix’s surging business. We have Disney Hotstar, HBO GO or HBO Max, Amazone Prime Video, Apple TV, Funimation, Crunchyroll and more.

Not forget to mention some competitors from Asia such as Viu, iQiyi, Tencent, Naver TV, Hooq and many more. Lot of companies accelerated their shift to streaming to grab the potential market especially due to pandemic situation.

The increasing competition also affect the curated contents of Netflix. Some Marvel’s character-based contents have returned home to Disney’s Disney Hotstar. Despite the collection of big titles in Netflix such as The Withcer, Ozark, Bridgerton, Stranger Things, and also Squid Games. But the establishment of franchises from Netflix is still behind compare to Marvel, DC, Star Wars, Harry Potter, and Disney’s princesses.

The decreasing subscriptions of Netflix can be seen as the new light of the emerging trend of streaming. The pandemic didn’t change the shift to streaming from television or cinema. It’s just hastening the adaptation. Now the pandemic is started to subdue, masks mandate is already lessening. The box office business is back in the game led by ‘Spider-Man: No Way Home’ and ‘The Batman’. It shows that consumers are no longer staying from the comfort of their home to watch their beloved movies.

Sources: Forbes, Global News, CNBC