Investors dumped Netflix shares after the streaming giant announced it would stop reporting subscriber figures, a key metric used to gauge performance in the competitive streaming wars. This move sparked concerns about slowing growth, especially as Netflix cracks down on password sharing.
For years, subscriber numbers have been the go-to metric for investors to compare streaming services like Netflix, Disney+, and HBO Max. However, Netflix is shifting focus to revenue and profitability, raising questions about its future growth strategy.
Analysts fear this decision might become an industry trend, making it harder to track the health of the streaming landscape. Additionally, Netflix’s second-quarter revenue forecast fell short of expectations, further spooking investors.
Netflix’s stock fell 7.3% to $565.85, its largest drop since July, as its revenue forecast for the second quarter was below estimates. If losses hold, its market valuation was set to fall about $19 billion.
With US streaming growth seemingly reaching a peak, Netflix faces challenges in maintaining its subscriber base. The company is betting on improving content quality, expanding its ad offerings, and finding new sources of revenue to keep investors happy.
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