The equity market in the United States didn’t respond well to Netflix’s strategy to grow its declining subscriber base on Thursday, as the firm’s stock plummeted.
Netflix has been losing subscribers, with 200,000 subscribers quitting the video streamer’s platform in the First Quarter of 2022. In the same year, the firm lost about 970,000 in the second quarter.
Last year, Netflix could only squeeze out 4 per cent growth, against the 32 per cent its rival, Disney, recorded during the same year.
In a bid to drive up its subscriber base, Netflix slashed subscription prices in over 30 countries, excluding Nigeria, which is one of its major markets in Africa.
It was learnt that Netflix cuts subscription prices in the following countries; Croatia, Slovenia, Bulgaria, Nicaragua, Venezuela, Kenya, Vietnam, Thailand, Ecuador, Yemen, Jordan, Libya, Iran, Kenya, the Philippines, Malaysia, Indonesia, and Egypt, the Wall Street Journal reported on Thursday.
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Netflix targeted countries where its subscription is low to increase demand for its service. This move will impact on the revenue and subscriber growth of the company going into the second quarter of 2023 and the rest of the year.
However, following the report, Ripples Nigeria’s analysis showed that Netflix’s share depreciated in value, indicating low interest in the firm’s shares among Nasdaq investors following the announcement.
A day before the announcement, Netflix’s stock was valued at $334.88 per share, but at the close of Thursday’s trading, it crashed to $323.65.
The share is now down to $320.35 on Friday, as at the time of filing this report, as the strategy to shore up the subscriber base and save earnings failed to convince investors of the future growth of Netflix.