By Dawn Chmielewski

(Reuters:) Global streaming giant Netflix Inc. (NASDAQ:), reported on Tuesday losing its subscribers for more than a decade. It also predicted that there would be more contraction in the third quarter. A rare misstep for a company that is a steady growth engine for investors, it was a loss for Netflix Inc.

Netflix dropped 200,000 subscribers during its first quarter. This was well below its modest prediction of adding 2.5 million subscribers. The decision to stop service in Russia in March after the invasion of Ukraine led to 700,000.

Netflix currently boasts 221.6 million subscribers. In October 2011, Netflix reported its last loss of customers.

Netflix predicted a dark outlook for its spring quarter. The streaming service said it would lose two million subscribers. This was despite having “Stranger Things,” “Ozark” back, and the premiere of “The Grey Man,” with Ryan Gosling and Chris Evans. According to Refinitiv data, Wall Street was targeting 227 millions for the second quarter.

The first quarter revenue increased 10% to $7.87 Billion, which was slightly lower than Wall Street’s estimates of $7.93 Billion. The company reported net earnings per share of $3.53 The company reported per-share net earnings of $3.53. This is due to the competition and large numbers of households having multiple accounts. Netflix stated that streaming had received a huge COVID boost, which has led to difficulties in signing up new customers.

The streaming giant was forecast to experience a slower rate of growth in spite intense competition from Amazon.com (NASDAQ), and other established media players like the Walt. Disney (NYSE:) Co, the new Warner Bros Discovery (NASDAQ) Inc, and cash-flush newcomers such as Apple Inc (NASDAQ)

According to Ampere Analysis, streaming services invested $50 billion last year in new content to try to retain or attract subscribers. The 50% increase in revenue is almost double the amount spent on new content by streaming services since 2019, the year when many more of these newer services began to launch. This indicates the fast escalation and intensification of “streaming warfare.”

Netflix’s focus on the rest of the globe is increasing as mature markets slow down, and it invests more in local content.

According to the company, “While Netflix costs hundreds of millions per home, nearly half the broadband households in the world don’t pay — which means there is huge potential for future growth,” they said.

According to Michael Pachter, Wedbush analyst, Netflix was able to raise subscription prices in the United States and the United Kingdom to help fund content production in Asia. The subscription costs in these markets, however are much lower.

Matthew Harrigan from Benchmark warned that an uncertain global economy would “aptly emerge as an albatross for member growth” and Netflix’s ability of to keep raising prices while competition intensifies.

Streaming services don’t have to be the only source of entertainment. Deloitte released the latest Digital Media Trends survey in March. It revealed that Generation Z, a group of consumers aged 14 to 25, spent more time playing video games than watching television or movies at home.

A majority of Gen Z/Millennial consumers polled claimed they spent more time viewing user-created videos such as those on TikTok, YouTube and YouTube than film or TV shows.

Netflix has started to invest in games, as it recognizes the change in entertainment preferences. However, this does not contribute to Netflix’s revenues.