Consumer discretionaries like Netflix are often the first to go when inflation comes a-knockin'.
๐ Background: OG streaming giant Netflix was a big time winner when COVID lockdowns forced households inside... and in front of the telly.
๐ What happened: As people return to regular life outside the house, Netflix predicted its growth would slow down, but thought it would still add 2.5 million subscribers in the first three months of 2022.
๐ What else: Things were actually a lot worse. Netflix managed to LOSE 200,000 subscribers, sending shares spiralling down 25% ๐ธ. They reckon it has a lot to do with their increased prices.
๐กWhen the economic times get tough, generally consumer discretionaries are the first to go from household budgets.
๐ก 'Consumer discretionary' is a term for products that are non-essential, but nice to have... if you can afford them. Food and electricity are essentials, Netflix - not so much.
๐กThe cost of living is going WAY up right now thanks to inflation. Think food, housing, and don't even get us started on petrol. As a result, people are choosing to save their pennies (and cancel Netflix).
Sign up for Flux and join 100,000 members of the Flux family
