The stock prices of streaming video companies fell in extended trading on Tuesday after Netflix released earnings that showed the sector leader lost subscribers for the first time in more than a decade.
Shares of Disney dropped as much as 5%, while Roku fell 6% after-hours after rising nearly 8% during regular trading. Warner Bros. Discovery, the owner of HBO Max, was off about 4%, and Paramount (formerly ViacomCBS) declined nearly 6%.
The news highlighted investor fears over a broader slowdown of consumer spending.
Netflix fell more than 25% in extended trading on Tuesday after reporting a loss of 200,000 subscribers in its recent quarter and projecting a loss of 2 million subscribers in the second quarter.
The video streamer also warned on Tuesday that it could start to crack down on password sharing, which could increase its number of paid subscribers. Netflix has allowed its 222 million users to share their account information with friends and family during its heady growth, but now it wants all users to pay. It estimated that as many as 100 million people were streaming Netflix with someone else’s password.
Netflix and other streaming companies were significantly boosted by the pandemic as consumers spent more time and money streaming content from home.
But as the economy reopens in the U.S. and people spend more time out of their houses, it’s almost as if the pandemic never happened — at least in terms of the relative weakness of Netflix stock.
On Tuesday, shares hit their lowest level since November 2019. The stock is now down more than 40% for the year, and more than 60% from its peak in November 2021.