By Nathalie Voit

Netflix stock plunged on April 20 following news that the global streaming service had lost 200,000 subscribers in the first quarter.

The loss of 200,000 subscribers in Q1 is the first time since October 2011 that the streaming platform reported negative membership growth during a quarter. The company is projecting a loss of two million paid subscribers in Q2.

“Our revenue growth has slowed considerably as our results and forecast below show,” Netflix said in its quarterly letter to shareholders. “Streaming is winning over linear, as we predicted, and Netflix titles are very popular globally. However, our relatively high household penetration – when including the large number of households sharing accounts – combined with competition, is creating revenue growth headwinds.”

Netflix expected to add 2.5 million net subscribers in the quarter ending March 31, according to its guidance forecast. The company added 4 million users in the same quarter last year.

Netflix blamed the suspension of its service in Russia and the closing down of all Russian paid memberships for a loss of 700,000 subscribers. Excluding the events in Russia, Netflix said paid net additions would have totaled 500,000 in Q1.

The company also pointed to increased competition from new streaming services like Disney+ and Amazon Prime Video and rampant password sharing for the stagnant subscriber growth.

Netflix said it plans to monetize sharing of the 100 million+ households using another household’s account.

“In addition to our 222m paying households, we estimate that Netflix is being shared with over 100m additional households, including over 30m in the UCAN region. Account sharing as a percentage of our paying membership hasn’t changed much over the years, but, coupled with the first factor, means it’s harder to grow membership in many markets – an issue that was obscured by our COVID growth,” Netflix said in the letter.

The streaming giant also admitted that the COVID-19 pandemic-induced boost to streaming had “clouded the picture” until recently. Netflix enjoyed substantial subscriber growth during the pandemic as coronavirus lockdowns prompted consumers to stay at home and turn to digital platforms for entertainment. However, the recent lifting of COVID-19 restrictions has led to lower-than-expected demand for digital streaming services as people can once again return to normal outdoor activities.

“COVID clouded the picture by significantly increasing our growth in 2020, leading us to believe that most of our slowing growth in 2021 was due to the COVID pull forward. Now, we believe there are four main inter-related factors at work,” Netflix said.

The videos streamer’s stock plunged 35% on April 20 following the grim earnings report. As of Thursday at 10:00 a.m. ET, Netflix shares are down 3.50% to $218.27 a share. The stock is now the worst-performing stock of 2022 in the S&P 500.