LOS ANGELES (AP) — Netflix’s stock has now lost all of its post-pandemic gains.
On Monday, the streaming service’s stock dropped more than 2% to roughly $332 per share, a 52-week low. This is a drop of more than 50% from the company’s 52-week high of $700.99 in mid-November.
The last time shares sold for roughly $332 per share was on March 20, 2020, right after pandemic lockdowns were implemented.
Netflix enjoyed considerable growth in 2020 and 2021 as users were forced to stay at home due to different limitations. However, as the regulations fade away, customers are moving toward out-of-home entertainment options such as movie theatres, restaurants, and theme parks. Netflix revealed disappointing subscriber numbers in its most recent earnings report.
The resurgence of the box office, spearheaded by “Spider-Man: No Way Home” and “The Batman,” proves that moviegoers are no longer content to sit on their sofas and watch movies.
According to a JPMorgan report from CinemaCon last year, Netflix is considering a more traditional theatrical distribution for some of its upcoming projects.
Netflix has historically been more concerned with offering material to its customers as fast as feasible rather than generating money at the box office. The streaming service has rejected the usual Hollywood release window, in which a picture is shown in cinemas for around three months before becoming available on video-on-demand or on the website or app of a streaming service.
Exceptions have been granted in the past to allow Netflix films to compete for Academy Awards. Netflix’s “The Power of the Dog” has a field-leading 12 Oscar nominations and is considered a strong candidate for many major prizes at the March 27 ceremony.
However, as a result of the epidemic, studios have reduced the release window from 90 to about 45 days, it appears Netflix is reconsidering its plan.
In addition, the corporation is experiencing greater competition from other streaming services, such as Apple and Disney, which are luring consumers away from Netflix content.
“There’s nothing specific today, but the market appears to ‘blame’ Netflix’s slowing growth on competition,” Wedbush analyst Michael Pachter said. “That makes sense, given that we have the option of traditional broadcast via cable or satellite, as well as premium services like Hulu, Paramount+, Disney+, HBO Max, Amazon Prime, Peacock, and Netflix, as well as a plethora of smaller options like Discovery, AMC+, Shudder, and many others.”
Netflix has published notable titles such as “The Witcher,” “Ozark,” “Bridgerton,” and “Stranger Things,” but it has struggled to develop enormous franchises in the same way that Disney and Warner Bros. did with Star Wars, Marvel, DC, and Harry Potter.
Much of the current stock price decline appears to be attributed to Netflix’s slow membership growth. In January, shares fell when the business anticipated only 2.5 million new net customers for the next quarter. Its fourth-quarter additions of 8.3 million fell little short of its own expectation of 8.5 million.
Netflix raised rates in North America earlier this year due to competition, slower subscriber growth, and rising production expenses. The monthly cost of the basic plan increased by $1 to $9.99, the standard plan increased by $1 to $15.49, and the premium plan increased by $1 to $19.99.