ISSUE
Friday, August 22, 2025
Volume 16 . Issue 73
Netflix shares have lost a quarter of their value on Tuesday after the company revealed a report that their subscribers shrank for the first time in a decade, which came as a warning of deepening troubles for the company ahead.
Netflix also projected it will shrink by another 2 million customers in the current second quarter, a huge setback for a company that regularly grew by 25 million subscribers or more a year.
As a coverup, Netflix plans to introduce low-cost advertising-supported plans, in a major departure from the company's earlier stance against advertising on the platform.
A lower-tier option that includes advertisements could keep some price-conscious consumers with the service and provide Netflix with a different avenue to garner funds. “It’s pretty clear that it’s working for Hulu. Disney is doing it. HBO did it," Netflix Co-CEO Reed Hastings said. “I don’t think we have a lot of doubt that it works."
Investors, analysts and Hollywood executives had been bracing for the company to report a sluggish start to the year, but Wall Street still expected Netflix to add 2.5 million customers in the first quarter. The shares, already down more than 40% this year, tumbled as much as 27% to $256 in after-hours trading.
The drop this year stemmed in part from Netflix’s decision to withdraw from Russia to protest the war against Ukraine. The company said there are more than 100 million households that use its service and don’t pay for it, on top of its 221.6 million subscribers.
Netflix shares have lost a quarter of their value on Tuesday after the company revealed a report that their subscribers shrank for the first time in a decade, which came as a warning of deepening troubles for the company ahead. Netflix also projected it will shrink by another 2 million customers...
Netflix shares have lost a quarter of their value on Tuesday after the company revealed a report that their subscribers shrank for the first time in a decade, which came as a warning of deepening troubles for the company ahead.
Netflix also projected it will shrink by another 2 million customers in the current second quarter, a huge setback for a company that regularly grew by 25 million subscribers or more a year.
As a coverup, Netflix plans to introduce low-cost advertising-supported plans, in a major departure from the company's earlier stance against advertising on the platform.
A lower-tier option that includes advertisements could keep some price-conscious consumers with the service and provide Netflix with a different avenue to garner funds. “It’s pretty clear that it’s working for Hulu. Disney is doing it. HBO did it," Netflix Co-CEO Reed Hastings said. “I don’t think we have a lot of doubt that it works."
Investors, analysts and Hollywood executives had been bracing for the company to report a sluggish start to the year, but Wall Street still expected Netflix to add 2.5 million customers in the first quarter. The shares, already down more than 40% this year, tumbled as much as 27% to $256 in after-hours trading.
The drop this year stemmed in part from Netflix’s decision to withdraw from Russia to protest the war against Ukraine. The company said there are more than 100 million households that use its service and don’t pay for it, on top of its 221.6 million subscribers.
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