Streaming stocks slide after Netflix says it is losing subscribers

Reed Hastings, Co-CEO, Netflix speaks at the 2021 Milken Institute Global Conference in Beverly Hills, California, U.S. October 18, 2021.

David Swanson | Reuters

The stock prices of streaming video companies fell in extended trading on Tuesday after Netflix released earnings that showed the company lost subscribers for the first time in more than a decade.

Shares of Disney dropped as much as 5%, while Roku fell 6% after-hours after rising nearly 8% during regular trading. Warner Bros. Discovery, the owner of HBO Max, fell nearly 4%, and Paramount (formerly ViacomCBS) fell more nearly 6%.

The news highlighted investor fears over broader slowdown of consumer spending.

Netflix fell more than 25% in after-hours trading on Tuesday after reporting a loss of 200,000 subscribers in its recent quarter and projecting a loss of 2 million subscribers in the second quarter.

Netflix also warned on Tuesday that it could start to crack down on password sharing, which could increase its number of of paid subscribers. It had allowed its 222 million users to share their accounts with friends and family to get them hooked, but now it wants all households who are streaming Netflix to pay. It estimated that as many as 100 million people were streaming Netflix with someone else’s password.

Netflix and other streaming companies were significantly boosted by the pandemic as consumers spent more time and money streaming content from home.

But as the economy re-opens in the U.S. and people spend more time out of their houses, it’s almost as if the pandemic never happened for Netflix, hitting its lowest price since Nov. 2019 on Tuesday. The stock is now down more than 40% for the year, and more than 60% from its November 2021 peak.