$50bn wiped off Netflix’s value as subscribers quit

After it revealed a sharp drop in subscribers, shares in the streaming service plummeted.

It wiped more than $50 billion off the firm's market value as experts warned of a struggle to get back on track.

After it raised prices and left Russia, it was hit by the intense competition from streaming rivals.

Some doubt its plans to boost growth, which include bringing in a free ad-supported service.

More than 100 million non-paying households watch the service this way, and it plans to crack down on password sharing.

One of America's best known investors, William Ackman, lost more than $400m on his investment in the streaming service.

Three months ago, his hedge fund bought the shares.

Mr Ackman said that investing in the company felt too risky because of its plans to change its business model.

In light of recent events, we have lost confidence in our ability to predict the company's future prospects with a sufficient degree of certainty.

In a trading update on Tuesday, the company said its total number of subscribers had fallen by 200,000 in the first three months of 2022, falling well short of its target.

In the three months to July, some two million more are likely to leave the service.

The streaming giant has run out of easy ways to grow, according to some analysts.

Squeezed consumers are cutting back on streaming services to save money, while some feel there is too much content to choose from, as competition from rivals such as Disney and Amazon increases.

Michael Hewson, an analyst at CMC Markets, said that consumers don't have unlimited funds, and that one or two subscriptions is usually enough.

If you move above that, something has to give in a cost-of-living crisis, and it doesn't have the deeper pockets of Apple, Amazon or Disney, which makes it much more vulnerable to a margin squeeze.

More than 220 million people subscribe to the world's leading streaming service. Since October 2011, it has enjoyed continuous growth in subscribers.

It admitted on Tuesday that it was losing customers to rivals and was struggling to expand.

The decision to raise prices in key markets had cost 600,000 subscribers in North America alone, while the exit from Russia over Ukraine cost it one million.

Revenue grew by 9.8% in the first three months of the year, despite the challenges.

It was a slower quarter than earlier ones, with profits falling more than 6% to roughly $1.6 billion.