Netflix has had a bad year in 2022, with company predictions predicting that 2 million subscribers will quit the once-dominant streaming service in the second quarter of this year alone.
Its situation on Wall Street has been even worse. Going into this week, it had already lost 42% of its value from its high, with another 35% drop in one day on Wednesday ahead of earnings. Since Enron, we haven’t witnessed a stock crash like this for a corporation so beloved by investors.
The 35% plunge in the stock price on Wednesday was the worst in a decade, slashing $40 billion from the company’s market capitalization alone.
So, what exactly is going on? Netflix earned more Emmy Awards in 2021 than any other network or platform (44 overall). However, providers with heavyweight corporations behind them, such as Disney, HBO Max, Apple TV, Amazon Video, NBC’s Peacock, Paramount, Hulu, and Sling, among others, are increasing rivalry.
Conditions on the ground are also rapidly shifting. Check out these headlines from two years ago, when COVID-19 put the country on lockdown.
“Netflix gets 16 million new sign-ups thanks to lockdown” — BBC
“Netflix Traffic Hits All-Time Highs Amid Coronavirus Pandemic” — Forbes
“2020 global streaming subscriptions top 1 billion amid COVID” — Los Angeles Times
People are leaving in droves as the COVID-19 pandemic fades, despite oversaturation and too many options. Despite increasing fuel costs, the major airlines are reporting record-breaking ticket sales.
United Airlines CEO Scott Kirby said in a news release last week that “the demand environment is the strongest it’s ever been in my 30 years in the industry.” “We’re starting to see clear evidence that the second quarter will be a historic inflection point for our business.”
Restaurants, athletic events, and parties are all becoming more popular. Streaming services were no longer considered a luxury in 2020 and 2021, but rather a need.
Binge-watching became nearly a necessity for sanity after months of lockdowns and limited options due to sports being canceled or strange to watch (thanks to those false supporters in the stadium).
Netflix shares soared from $265 per share in 2018 to more than $600 by the end of 2021. In the first four months of 2022, it has given almost all of those gains back.