(Eagle News) — A Netflix shareholder filed a suit accusing the streaming television titan of not making it clear that subscriber numbers were in peril.

It said top executives did not tell investors that subscriber growth was slowing down due to shared user accounts and stronger market competition.

After Netflix announced its quarterly earnings in April, a disclosed drop of just 200,000 users was enough to send shares plunging. This was less than 0.1% of its total customer base.

In the current quarter, the company anticipates a much larger drop of around 2 million net subscribers.

Netflix executives said on an earnings call that they are focused on combating the 100 million households who watch Netflix for free thanks to shared passwords.

CEO Gregory Peters said Netflix wasn’t trying to shut down sharing, but THEY’RE going to ask USERS to pay a bit more to be able to share.

Competition in the streaming TV market meanwhile has intensified, with the cost of producing original shows climbing as well.

To attract viewers, Netflix is preparing cheaper subscriptions that include advertisements, which it expects to roll out in the next couple of years.

The suit filed Tuesday, May 3, 2022, is seeking to represent everyone who owned Netflix shares in the six months ending April 19, 2022, and is asking for unspecified cash damages as well as compensation for financial losses.

(Eagle News Service)