Free Fall //top\\ - Netflix

Is Netflix in a terminal free fall, or is the market simply confusing turbulence with a crash? The panic began in earnest in April 2022, when Netflix reported a loss of 200,000 subscribers in the first quarter—its first loss in over a decade. The company then projected a loss of another 2 million in Q2. The stock was cut in half almost overnight.

First, the company finally admitted that password-sharing (estimated to affect over 100 million non-paying households) is a problem. After years of famously tweeting that "Love is sharing a password," Netflix is now charging extra for "sub accounts" in Latin America and Europe, with a global rollout imminent. netflix free fall

Second, Netflix is doing what it once mocked cable for doing: After insisting for years that it would never run commercials, the company launched a "Basic with Ads" tier in late 2022. Is Netflix in a terminal free fall, or

The correction we are seeing is not a death spiral. It is the painful, violent recalibration of a pioneer hitting the ceiling of its original business model. Netflix isn't falling off a cliff; it is learning to fly at a lower, more profitable altitude. The stock was cut in half almost overnight

While Disney and Warner Bros. Discovery are slashing content to save cash, Netflix is still spending roughly $17 billion annually on content. They have the data, the global reach, and the algorithm. Furthermore, the "free fall" narrative may be overblown.