The company’s customer base fell by 200,000 subscribers during the January-March period, according to a quarterly report released on Tuesday.
It’s the first time that Netflix’s subscribers have fallen since the streaming service became available throughout most of the world six years ago.
Worse, Netflix is now projecting a loss of another two million subscribers during the April-June period.
If the stock drop extends into Wednesday’s regular trading session, Netflix shares will have lost more than half of their value so far this year.
Netflix also lost 800,000 subscribers in 2011 after it unveiled plans to begin charging separately for its then-nascent streaming service, which had been bundled for free with its traditional DVD-by-mail service.
The customer backlash to that move elicited an apology from Netflix CEO Reed Hastings for botching the execution of the spin-off.
The service also saw a decline in US subscribers in 2019.
But the latest subscriber loss was far worse than a forecast by Netflix management for a conservative gain of 2.5 million subscribers.
The news deepens troubles that have been mounting for the streaming since a surge of sign-ups from a captive audience during the pandemic began to slow.
It marks the fourth time in the last five quarters that Netflix’s subscriber growth has fallen below the gains of the previous year.
Now investors fear that its streaming service may be mired in a malaise that has been magnified by stiffening competition from well-funded rivals such as Apple and Walt Disney.