Streaming Giant Netflix’s Stock Price Tumbles 41% From Its All-time High In November 2021

Streaming giant Netflix was once a stock darling. Its stock price peaked close to US$700 in November 2021. However, it went south after that and has since tumbled as much as 41 per cent to around US$400 on 21 January 2022. With guidance from your economics tutor Singapore in economics tuition Singapore, list the possible reasons for Netflix’s tumbling stock price. The tumbling stock price can be attributed to its slower than expected growth in terms of new subscribers and increasing competition from other streaming companies.

Stagnant Subscription Number

Currently, Netflix has a total of 213.5 million subscribers across the globe. 74 million of them are subscribers in the United States and Canada. In October 2021, it added 4.4 million subscribers globally, including 70,000 from the United States and Canada. By the end of 2021, Netflix reported a total of 221.8 million subscribers. Though the streaming giant is way ahead of its competitors in terms of subscribers, its subscription has been growing at a much slower rate as compared with its competitors. For example, Disney+ had 118.1 million subscribers as of October 2021. During the period from October 2020 to October 2021, its subscription grew a sterling 60 per cent year on year while Netflix’s subscription grew just 9 per cent. You may consult your economics tutor Singapore in your economics tuition Singapore class about the competitive advantages of Netflix. To learn the definition of competitive advantage, you may sign up for economics tuition Singapore with a reputable economics tutor Singapore.

Analysts believe that Netflix is struggling to find more subscribers in mature markets such as the United States and Canada. To keep growing its base of subscribers, the company must look to developing markets such as India and other countries in the Asia Pacific region. Mr Edmund Quek is the best economics tutor Singapore who has over 20 years of experience teaching economics tuition Singapore at Junior College levels. To find out more about this economics tutor Singapore, please visit the website of his economics tuition Singapore centre at

Price Raise: Netflix’s Solution

In response to the stagnant subscriber number, Netflix announced on 21 January 2022 its plan to raise the subscription prices in the United States and Canada. In the United States, the price of Netflix’s basic subscription plan will increase by US$1 to US$9.99 while the prices of the standard and premium plans will increase by US$1.50 to US$15.49 and by US$2 to US$19.99 respectively. Similarly in Canada, the price of Netflix’s standard and premium plans will increase by C$1.50 to C$16.49 and by C$2 to C$20.99 respectively. However, the price of its basic plan remains unchanged. In consultation with your economics tutor Singapore in your economics tuition Singapore class, discuss the pros and cons of raising prices. Netflix last raised its prices in October 2020.

The announcement on price increases came one week before the company reports its fourth quarter earnings. Following the announcement, Netflix’s stock price rose about 2 per cent. In discussion with your economics tutor Singapore in your economics tuition Singapore class, explain the positive impact of price increases on its earnings. You may also brainstorm with your economics tutor Singapore in economics tuition Singapore the possible negative implications of price increases, for example, on demand for its different subscription plans. The price increases may help offset its stagnation in new subscriptions. However, they may also lead to greater difficulties in getting new subscribers, especially in the face of increasing competition from its rivals such as Disney+, HBO and Peacock, among others.

Linda Geng

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