Have we hit peak Netflix?

This time last year, Netflix was fêted as the future of television. Its subscriptions grew by 30 per cent over 2020 as people bought in entertainment during lockdown. Netflix always warned that its growth would slow afterwards and the market seemed to accept that. But its shares have halved since their mid-November peak after a radical reappraisal of its fortunes. What’s going on?

Those shares plunged 27 per cent in pre-market trading when Netflix said that, rather than see growth slowing to a mere 2.5 million more subscribers as it had expected for the first three months of this year, it has entered decline – actually losing 200,000 subscribers. A small dent on its 221 million total but it’s the direction of travel that matters. Netflix has borrowed huge sums based on expansion hopes that are looking increasingly shaky. The pullout from Russia was always going to hurt but it now expects to lose another two million subscribers by July.