Why Netflix Shares Are Going Down

Netflix shares have been on a rollercoaster ride in the last few months, with prices dipping as low as $314 in late December 2020. The dip in Netflix’s share prices can be attributed to a few different factors. Firstly, the entertainment giant has seen a decline in subscriber growth over the past six months. In October 2020, Netflix reported a total of 195.15 million paid subscribers, a decline of 0.7% from the previous quarter. This decline was largely due to the lack of new content released due to the COVID-19 pandemic. With movie theaters closed and production times slowed, Netflix’s library of new content has taken a hit. This has caused many subscribers to cancel their subscriptions, leading to a dip in Netflix’s share price. Secondly, Netflix’s content costs have skyrocketed over the last few years, with the streaming service spending an estimated $17 billion in 2020 alone. This high cost of content has weighed on Netflix’s profits and weighed down its stock price. Finally, competition from other streaming services has been a major factor in Netflix’s recent share price decline. With Disney+, Apple TV+, and HBO Max all launching in the last year, Netflix’s market share has taken a hit as subscribers flock to these new services. All of these factors combined have caused Netflix’s share price to decline in the last few months. While the stock is still a good long-term investment, investors should be wary of the potential risks associated with Netflix’s share price.