In a rare instance, it was a very bad day for Netflix on Thursday, as the streaming giant lost a whopping $17 billion in overall value. This comes after it was reported that the company failed to meet expectations, in terms of subscriber growth, last quarter. Netflix missed international projections by more than 2 million subscribers and they actually lost a reported 126,000 subscribers in the U.S. Wall Street did not respond kindly to the numbers, as the company's stock fell by more than 10 percent.
According to several reports, Netflix stock took a dive, dipping 10.3 percent to $325.21 per share. This is the worst drop the company has suffered in a single day in over three years, which equates to the $17 billion loss. Those losses, rather amazingly, are larger than the entire valuation of companies such as Roku ($12.4 billion) and Viacom ($12.5 billion), just to offer some perspective on the situation. Needless to say, this is not a good sign, however, it's not quite time to start shedding tears for the streaming service just yet.
Netflix still is valued at $142 billion, even after the huge loss. They also now have more than 151 million subscribers worldwide, after adding 2.7 million new customers across the globe in quarter 2. The company also posted massive earnings, bringing in $4.92 billion in revenue last quarter, which was on par with expectations from Wall Street. That may have been the very thing that saved this situation from being worse. The question now becomes, is this just a minor setback? Or is this just the tip of the iceberg?
At present, Netflix is the unquestioned king in the streaming game. Others currently in the marketplace, such as Amazon and Hulu, don't come close. However, they have fierce competition coming down the pipeline in the near future in the form of Disney+, Apple+ and HBO Max, amongst others. Netflix is also losing some of their most popular licensed content, including Friends and The Office, as the competition heats up. Couple that with the fact that the company blamed its subscriber loss in the U.S. on the recent price hike and things start to look at least a little uncertain in the years ahead.
While Netflix started life as a DVD mail service that converted to a streaming service, which exclusively offered licensed content, they really took off when original programming such as House of Cards and Orange Is the New Black was introduced. In the years since, they've outspent virtually everyone in the industry on content and that has helped them to amass subscribers. But now, they have to keep up the spending and keep the content coming, or risk being left in the dust for sure. The streaming wars are officially here, everyone and it's no longer a guarantee that Netflix will be able to stay on top. This news was previously reported by The Wrap.