Netflix lost subscribers, but why? And what does it mean for you?

Netflix lost subscribers this year for the first time since 2011

Ads are coming to Netflix in early 2023

The number of shows and movies Netflix produces each year could fall

It turns out that not everyone is watching Netflix.

The world's largest streamer lost 970,000 subscribers in the three months ending June 30, the company announced Tuesday in its second-quarter earnings report, ahead of its dire prediction in April of losing 2 million.

It's been a bad few months, businesswise, for the streaming service, which has upended the TV and film industries since it began debuting original programming almost 10 years ago. After its stock price plunged 71% since November, the past year, the company is testing charges for password sharing in Latin America and plans a cheaper version of the service with ads – a major reversal. Employee layoffs have made the news even as competitors from HBO Max to Disney+ and Hulu have made gains.

So what is happening at Netflix? And more importantly, will it change what you get to watch when you chill on a Saturday night?

We spoke to experts in the entertainment industry about what's going on at Netflix, and what might happen next. It might be as wild a ride as any Netflix original series.

What happened at Netflix?

In an April earnings call, the streamer announced that it had lost 200,000 subscribers, marking its first decline since 2011. It then predicted a loss of 2 million subscribers in the three months ending June 30. The news and the prediction panicked Wall Street and reverberated through Hollywood, damaging the company's reputation and prompting layoffs. And changing priorities might alter what shows and movies get made, how long they last, and if subscribers can afford Netflix without the interruption of commercials.

Production of new TV shows and movies takes some time, so "any moves Netflix makes today won't be felt for another two years, or possibly more when it comes to the consumer," says Tom Nunan, a former network and studio president who now teaches at the University of California, Los Angeles.

The second-quarter subscriber loss beat the company's own expectations – and Netflix is forecasting a gain in the next three months – so all may not look so terrible for the streamer, for now. Analysts say the release of "Stranger Things" Season 4 in two parts, which Netflix claims is its most-streamed English language series, may have helped stem more pronounced losses this quarter.

So why did Netflix lose subscribers?

The subscriber loss "seems to be due to increased competition from other streaming services, adverse global economic circumstances, and the fact that the company already has a very high level of subscribers," says Ferran G. Vilaró, CEO of streaming video analytics company NPAW. Netflix has 220.6 million subscribers worldwide, dwarfing the 74 million total for HBO Max and 87.6 million for Disney+, which are available in fewer countries.

At some point. there may be a ceiling on how many people want to subscribe to a streaming service.

"The scale of such ambition is impressive, but it turns out it's unsustainable," says Nunan, who cites the easing of pandemic restrictions as one of the reasons some might ditch the ’flix. Consumers are "looking closely at their streaming bills and asking, 'Do I really need all of this content, and more importantly, can I afford it?'"

When will Netflix get ads? What will they look like?

A lower-priced, ad-supported tier of Netflix subscriptions is on the way, due in early 2023, Netflix said Tuesday. The service didn't really explain what those ads would look like, and in what markets they'd appear first. "Like most of our new initiatives, our intention is to roll it out, listen and learn, and iterate quickly to improve the offering. So, our advertising business in a few years will likely look quite different than what it looks like on day one."

There are similar plans already available from HBO Max, Hulu and Peacock (which also offers a free ad-supported tier), and soon Disney+ will join their ranks. It's just a matter of how long it takes Netflix, which last week agreed to partner with Microsoft for help, to get it up and running.

The price has not yet been announced (the most basic current ad-free monthly subscription costs $9.99, but the standard tier is $16.49) and it's not clear how the ads will fit into the programming. Will they be jammed into the middle of episodes never designed with a natural break for them, like those for network series are? "The elegance (of TV commercials) comes when they think about how many ads to place, where to place them and at what pace," Nunan says.

Netflix's ads could also be very specifically tailored for its subscribers.

"The industry is increasingly moving toward highly targeted and personalized ads that are able to maximize the value for advertisers," says Vilaró. "Netflix certainly has the data capabilities needed to implement these types of ads, but that doesn’t mean it would necessarily do so."

Will Netflix make fewer shows and movies?

The sheer churn of new content on the streamer will probably slow down, experts say.

"Netflix has taken an expensive and extremely high-risk approach to streaming which seems to be: Let's outspend everyone and be all things to all streaming consumers. The scale of such ambition is impressive, but it turns out it's unsustainable. They are learning to become more strategic," Nunan says.

There's a new mandate for "Bigger, better, fewer" movies at Netflix, the Hollywood Reporter says, suggesting the streamer will seek more tentpole, A-list fare like "Red Notice," and fewer "vanity projects" such as Martin Scorsese's "The Irishman." Netflix's latest high-profile film, "The Gray Man" (in theaters, streaming on Netflix on Friday) starring Ryan Gosling and Chris Evans, is an example of one of these bigger films, reportedly costing $200 million.

"Netflix at this point is caught between a clear push to become more populist and broad-ranging and the fact that what's drawing people to other streamers is their strong connection to franchises," says Myles McNutt, an associate professor of communications at Old Dominion University.

Already, production budgets for upcoming Netflix series are being squeezed, according to a studio executive, except for the biggest titles like "Stranger," which cost more than $25 million an episode for its newest season, the Wall Street Journal reported.

Will Netflix still save shows like 'Manifest'? Will my favorite show last longer than three seasons?

The business of "saving" shows canceled elsewhere, as Netflix did for NBC's "Manifest" and Fox's "Lucifer," among others, seems to have moved to the free streamers: Roku nabbed a follow-up film to NBC's canceled "Zoey's Extraordinary Playlist" in 2021, and Amazon's Freevee picked up Season 2 of Showtime's "American Rust," starring Jeff Daniels. Those streamers are jockeying for a place at the table, and name-brand series are helping them get there.

"Netflix picked up 'Manifest' because it has data that proves the show has enough avid audience members to make the renewal a good business investment," says Nunan. These renewals on new networks or streamers are "always because the new 'show parent' believes in the property and has data to back up their beliefs. It's always a business decision, never an emotional 'saving' decision."

Netflix has earned itself a reputation for canceling series after just two or three seasons, a result of a business model focused on luring new subscribers with new content.

"Longer-running shows tend to cultivate a loyal, more invested audience and build deeper relationships between the platform and its subscribers. But they can also be more expensive," says Vilaró, referring to the increase in salaries for actors and creatives as a series ages. Series that aren't major tentpoles like "Bridgerton" or "Stranger Things" will last for multiple seasons only if they continue winning or retaining subscribers.

What else might change at Netflix?

It's a tough time in the economy, and Hollywood isn't immune. Netflix might make big changes as the ripple effects continue to be felt. Streaming TV is starting to look more like basic cable, as bundles emerge (Disney+, Hulu and ESPN+), ads become more prevalent and shows are increasingly released weekly instead of all at once.

"The most important lesson of our current moment is that Netflix's disruption was temporary: one by one, its qualities that shaped every streaming service after them – binge releases, no advertisements – are being undone," McNutt says. "The future of television will, despite what might have seemed true five years ago, look closer to television's past than we might have imagined."

Contributing: Brett Molina, Gary Levin

Netflix stock plunges after subscriber losses - CNN

After shares tanked earlier this year because of concerns over its subscriber growth, the streaming leader said that it lost subscribers when it reported first quarter earnings on Tuesday.

now has 221.6 million subscribers globally. It shed 200,000 subscribers in the first quarter of 2022, the company reported on Tuesday, adding that it expects to lose another two million in the second quarter. The service was expected to add 2.5 million subscribers in the first three months of the year.

Netflix's stock dropped 35% on Wednesday, instantly wiping $50 billion off the value of the company.

Netflix's first quarter profit was $1.6 billion, down from $1.7 billion in the year-earlier quarter. Revenue jumped nearly 10%, to $7.9 billion.

It cannot be overstated just how bad of a report this is for the king of streaming. The company's stock has fallen more than 40% year to date, and coming into the earnings there was a lot of concern from investors regarding its growth. The company hasn't lost subscribers in more than a decade.

What happened?

In its letter to investors, the company said that since it launched streaming in 2007, the company has "operated under the firm belief that internet-delivered, on demand entertainment will supplant linear TV," But, it added, in the near term "we're not growing revenue as fast as we'd like."

Netflix said that the pandemic "clouded the picture by significantly increasing our growth in 2020, leading us to believe that most of our slowing growth in 2021 was due to the Covid pull forward."

But there are many different factors behind its subscriber stagnation, including competition from traditional media companies that have gotten into the streaming market in recent years, as well as widespread password sharing

"In addition to our 222 million paying households, we estimate that Netflix is being shared with over 100 million additional households, including over 30 million in the [United States/Canada] region," the company said.

The company also blamed "macro factors" that are affecting many companies right now, such as "sluggish economic growth, increasing inflation, geopolitical events such as Russia's invasion of Ukraine , and some continued disruption from Covid are likely having an impact as well."

Netflix said that pulling out of Russia cost the company 700,000 subscribers.

The company's bad report is likely to roil the streaming market given that so many other firms have changed their business strategies to compete with Netflix.

Disney DIS , for example — one of Netflix's biggest rivals — was down roughly 5% Tuesday evening.

What now?

Netflix told investors Tuesday that it plans to turn the tide by doing what it's always done: Improving the service.

"Our plan is to reaccelerate our viewing and revenue growth by continuing to improve all aspects of Netflix — in particular the quality of our programming and recommendations, which is what our members value most," the company said.

The company added that it's "doubling down on story development and creative excellence" and that it launched the "double thumbs up" tool that will allow members to "better express what they truly love versus simply like."

Netflix also said it will focus more on "how best to monetize sharing" in terms of passwords.

"Sharing likely helped fuel our growth by getting more people using and enjoying Netflix. And we've always tried to make sharing within a member's household easy, with features like profiles and multiple streams," the company said. "While these have been very popular, they've created confusion about when and how Netflix can be shared with other households."

The company said last month that over the last year, it's been working on ways to "enable members who share outside their household to do so easily and securely, while also paying a bit more."

"While we won't be able to monetize all of it right now, we believe it's a large short- to mid-term opportunity," it said.

Another place that could help increase revenue and attract more subscribers for the service is advertising.

Netflix CEO Reed Hastings has always been allergic to the idea of having commercials on the platform, but on Tuesday's call with analysts he mentioned that it could be a possibility in the future.

"Those who have followed Netflix know that I've been against the complexity of advertising and a big fan of the simplicity of subscription. But as much as I'm a fan of that, I'm a bigger fan of consumer choice," Hastings said on the post-earnings call. "And allowing consumers who like to have a lower price, and are advertising tolerant, get what they want makes a lot of sense."

He added that the company is looking at that now and trying to figure it out "over the next year or two."

"Think of us quite open to offering even lower prices with advertising," Hastings said.

Despite the dramatic growth slowdown that puts its strategy into question, Netflix remained defiant.

"This focus on continuous improvement has served us well over the past 25 years," Netflix said. "It's why we are now the largest subscription streaming service in the world on all key metrics: paid memberships, engagement, revenue and profit."

Correction: An earlier version of this article included an incorrect reference to fourth quarter earnings and misstated profit and revenue.

Netflix's collapse is a warning sign for stocks - CNN

A version of this story first appeared in CNN Business' Before the Bell newsletter. Not a subscriber? You can sign up right here . You can listen to an audio version of the newsletter by clicking the same link.

London (CNN Business) Shares of Netflix ( NFLX ) are imploding after the company reported its first quarterly loss of subscribers in more than a decade, far underperforming expectations and worrying investors that had been betting that a handful of big tech companies would continue to grow at a rapid clip.

What's happening: Netflix's stock dropped 30% when the market opened on Wednesday, instantly wiping more than $45 billion off the value of the company.

Netflix said it shed 200,000 subscribers in the first three months of the year, when it had been expecting to add 2.5 million.

The streaming giant, whose stock had already dropped more than 40% year-to-date, blamed the attrition on increased competition for viewers and Russia's invasion of Ukraine.

Netflix said its decision to pull out of Russia cost the company 700,000 subscribers. But the economy isn't helping, either.

Inflation is forcing households to reevaluate their budgets. People in Great Britain canceled about 1.5 million streaming subscriptions in the first three months of 2022. More than a third did so to save money, according to a new report by media consultancy Kantar.

"Food and energy are people's priorities right now, not watching 'Stranger Things,'" CMC Markets chief market analyst Michael Hewson told me.

Netflix signaled it could make big changes to its business as it tries to stem the bleeding. It's taking another look at how to address password sharing. CEO Reed Hastings also told analysts that the company will consider a lower-price subscription option with advertising.

"I've been against the complexity of advertising and a big fan of the simplicity of subscription," Hastings said Tuesday. "But as much as I'm a fan of that, I'm a bigger fan of consumer choice."

Big picture: Hewson said the stock plunge shows that Netflix was extremely overvalued, as investors — flush with cash during the pandemic recovery — fed a huge rally. Shares of Netflix rose 86% from the end of 2019 through 2021, while the S&P 500 climbed 48%.

"They were assuming people were going to be locked down forever," Hewson said, adding that unlike Apple and Amazon, Netflix doesn't have many alternative sources of revenue.

Clearly, the market mood has changed. The strong reaction could set the stage for another turbulent earnings season, with investors already on edge after disappointing results from the big banks.

When companies reported fourth quarter results earlier this year, Netflix and Facebook experienced huge stock losses as investors signaled growing sensitivity to downbeat predictions for the future. That was because the Federal Reserve was set to start raising interest rates, a move that would weigh on high-growth companies. Facebook's disastrous results triggered the biggest loss in market value for an S&P 500 company on record.

Now, rates are officially on the rise, and there's daily debate about whether the Fed could be even more aggressive than expected. The war in Ukraine is also dragging down sentiment. That could tee up big swings for top stocks as they disclose results.

Attention turns to Tesla earnings

Investors have been spending a lot of time following CEO Elon Musk's ploy to buy Twitter. But come Wednesday evening, attention will turn back to a company he already controls.

Tesla TSLA reports first quarter results after markets close. Analysts have strong expectations, my CNN Business colleague Chris Isidore reports.

The electric carmaker's earnings are forecast to jump 142% from a year ago. Other traditional automakers, such as General Motors, Ford, Toyota and Volkswagen are all expected to report a drop in earnings due to supply chain problems and production issues.

Watch this space: Musk joined the call with analysts last quarter. Will he be on this time around?

If he isn't, that could feed Wall Street's worries that he's too busy trying to take Twitter private to deal with his management responsibilities. If Musk does dial in, there could still be risks, given his tendency to speak off the cuff.

Another point of focus will be lockdowns in China, which have affected Tesla's production in Shanghai. Credit Suisse analysts estimate that the recent shutdown there prevented the manufacture of 90,000 vehicles.

Shareholders will want to know if the plant can stay open given restrictions, and how suppliers of critical parts such as batteries are faring.

Investor insight: A lot is riding on Tesla's performance. Disappointing results could further disrupt a stock market that's already unsteady.

Gas prices are creeping higher again

Prices at the pump have stopped falling from their recent highs — and some forecasters are warning of another uptick as the summer driving season looms and the war in Ukraine drags on, my CNN Business colleague Matt Egan reports.

After a slow-but-steady decline, the national average price for regular gasoline bottomed out at $4.07 a gallon last week, according to AAA. Since then the national average has increased five days in a row , climbing to $4.11 a gallon on Wednesday.

It's the first increase in gas prices since early March, when turmoil in energy markets hit a crescendo following the invasion of Ukraine. And it dashes hopes that the national average would drop to $4 a gallon, taking pressure off inflation that's running at the fastest pace in 40 years.

"It isn't going down anymore," said Andy Lipow, president of consulting firm Lipow Oil. "This is terrible news for inflation."

Previously, Lipow had been forecasting a return to $4 gas. But he abandoned that call because of renewed concerns about Russia's oil supplies and a pop in gasoline futures, a major driver of wholesale and retail prices.

Up next

Procter & Gamble PG SL Green Realty SLG Tesla TSLA Alcoa AA United Airlines UAL reports results before US markets open.andfollow after the close.

Also today: US existing home sales for March arrive at 10 a.m. ET.

Netflix to hike monthly prices for 58 million subscribers

Michael Liedtke

Associated Press

SAN FRANCISCO — Netflix is raising its U.S. prices by 13 percent to 18 percent, its biggest increase since the company launched its streaming service 12 years ago.

Its most popular plan will see the largest hike, to $13 per month from $11. That option offers high-definition streaming on up to two different internet-connected devices simultaneously. Even at the higher price, that plan is still a few dollars cheaper than HBO, whose streaming service charges $15 per month.

The extra cash will help to pay for Netflix's huge investment in original shows and films and finance the heavy debt it has assumed to ward off rivals such as Amazon, Disney and AT&T.

This marks the fourth time that Netflix has raised its U.S. prices; the last hike came in late 2017. But this is the first time that higher prices will hit all 58 million U.S. subscribers, the number Netflix reported at the end of September.

Previously, Netflix had continued to offer a basic, $8-a-month streaming plan while raising rates on more comprehensive plans with better video quality and options to watch simultaneously on different devices.

This time, the price for the cheapest plan is going up to $9 per month. A premium plan offering ultra-high definition will jump to $16 per month from $14.

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The new prices will immediately affect all new subscribers and then roll out to existing customers during the next three months. Customers in about 40 Latin America countries where Netflix bills in U.S. currency will also be affected, excepting key international markets such as Mexico and Brazil.

Netflix had nearly 79 million subscribers outside the U.S. as of September.

Higher prices could alienate subscribers and possibly even trigger a wave of cancelations. For instance, Netflix faced a huge backlash in 2011 when it unbundled video streaming from its older DVD-by-mail service, resulting in a 60 percent price increase for subscribers who wanted to keep both plans. Netflix lost 600,000 subscribers after that switch.

The company is now betting it can gradually raise its prices, bolstered by a string of acclaimed hits during that past five years that have included "House of Cards," ''Orange Is The New Black," ''Stranger Things," ''The Crown" and, most recently, the film "Bird Box."

"We change pricing from time to time as we continue investing in great entertainment and improving the overall Netflix experience," the company said in a statement.

Consumers also have an increasing array of other streaming options. Amazon offers a streaming service as part of its Prime shipping program for $13 per month, or $120 for an annual membership. Hulu sells an ad-free service for $12 per month. AT&T's WarnerMedia unit plans a broader streaming service this year centered on HBO. Walt Disney is gearing up to launch a streaming channel this year.

With Apple also widely expected to join the video-streaming fray, the competition for programming is enabling top directors, writers and actors to charge more for their talents. That has intensified financial pressure on Netflix, which hasn't been bringing in enough money to pay for all its programming and other business expenses.

The company burned through about $3 billion last year and is expecting to do so again this year. To offset the negative cash flow, Netflix has been borrowing heavily to pay for programming. The Los Gatos, California, company had accumulated nearly $12 billion in debt before borrowing another $2 billion in an October bond offering.

Concerns about the stiffening competition and Netflix's ability to sustain its current leadership in video streaming has caused the company's stock price to slide by 21 percent from its peak of $423.21 reached last June. The shares stood at $332.94 heading into Tuesday's trading session.

Netflix loses subscribers, but stops the bleeding - CNN

New York (CNN Business) Netflix reported Tuesday that it lost 970,000 subscribers in the second quarter of 2022 — a number far lower than its own forecasts, which had projected that the streaming giant would lose two million subscribers.

The company also said it would add another one million subscribers in the third quarter, a number that was slightly lower than Wall Street expectations. But investors were clearly happy with the results, and Netflix shares jumped as much as 8% on Tuesday in after-hours trading.

After disclosing in April that it lost 200,000 subscribers , leading to a steep drop in its share price, all eyes were on Netflix Tuesday, with Wall Street, Hollywood and the media world all hyper-focused on its subscription numbers. The company's shares had dropped dramatically during a nightmare year.

But Netflix's second quarter profit came in at $1.4 billion, up from $1.3 billion in the year-earlier quarter. Revenue jumped roughly 8.6% year over year, to $7.9 billion.

Netflix's biggest subscriber loss came from its biggest market, the United States and Canada, where the streamer said it lost 1.3 million users in the second quarter. But that was offset by increased subscriptions elsewhere.

Read More

No magic for Disney investors - CNN

New York (CNN Business) Disney investors aren't having as awful a year as Netflix shareholders. But that's not saying much.

has plunged more than 40% this year, ahead of its first quarter earnings release after the closing bell Tuesday. Meanwhile, shares ofhave dropped nearly 15% so far in 2022. That makes Disney one of the worst performers in the Dow , which is down just 4% this year.

Both companies have been plagued by concerns about streaming competition and the fierce battle for subscribers.

Stream dreams have turned to profit nightmares

Despite Disney's massive library of movies and shows thanks to its own branded studio, as well as Marvel, Pixar and Star Wars creator Lucasfilm, investors are worried that this abundance of content won't boost streaming subscription growth enough to offset slowdowns in its traditional broadcast and cable TV businesses.

"Disney+, Hulu, and ESPN+ have the scale and management conviction to over time be a massive global streamer," said JPMorgan analyst Philip Cusick in a report Tuesday. But he added that "this isn't necessarily as good a business as Disney used to have in TV."

Traditional media companies like Disney used to rely a lot more on lucrative advertising sales and affiliate fees from cable companies to carry their channels, but the shift to streaming has upended that model. Investors now are more interested in streaming margins and not merely the bragging rights that come from how many subscribers a company has.

"The market appears to be moving past rewarding media companies, as it did in 2020 and 2021, simply for their forecast of future streaming subscriber growth," said MoffettNathanson analyst Michael Nathanson in a report last month.

"Now it seems that investors are looking further down the income statement — and also, finally, digging through the cash flow statement — to try to determine the underlying steady state profitability of the pivot to Direct-to-Consumer content delivery," Nathanson added.

Nathanson lowered his price target on Disney in March from $165 a a share to $150 due in part to worries about lower profit margins.

Florida controversy still an issue for Disney

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Whether or not the Florida controversy is having an actual impact on Disney+ subscriptions, movie and theme park attendance and ratings for Disney-owned ABC and ESPN is up for debate.

However, one analyst noted that the "Don't Say Gay" issue could also hurt the company in another way, if more liberal Hollywood celebrities decide not to work with the House of Mouse.

"The single most important [Disney] asset is its brand, next is its talent. If the controversy leads to a loss of key creative talent, it would clearly be a negative," said Loop Capital's Alan Gould in a report earlier this month.

Whatever happens, it's clear that Wall Street is not happy with how Disney has performed since Chapek took over from Iger in February 2020.

Disney shares are now hovering near their lowest levels since November 2020. To be sure, Chapek was dealt a bad hand since the start of his tenure coincided with the beginning of the Covid-19 pandemic in the United States, an event that led to a dramatic slowdown in tourism and leisure activities like going to see movies.

Disney should have a big 2022 at the box office

But some are hopeful that Disney will be able to soon turn things around.

Michael Morris of Guggenheim Securities wrote in a report late last month that the parks business should rebound thanks to new attractions like "Star Wars: Galaxy's Edge" and "Avengers Campus," increased visits from foreign travelers to the flagship resorts in Orlando and California and a full reopening of international parks and cruise lines.

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And JPMorgan's Cusick noted Disney's strong slate of movies this summer and later this year as a positive.

Box office revenue should start to bounce back thanks to the upcoming releases of sequels for Marvel's Dr. Strange, Thor and Black Panther, the Pixar movie "Lightyear" about the inspiration behind the popular "Toy Story' character. Also coming is the highly anticipated first sequel to the 2009 hit "Avatar." ("Avatar 3" will follow in 2024.)

Dow sinks sharply as Wall Street worries about drastic action from ...

New York (CNN Business) US stocks have plunged into a bear market as Wall Street investors grew increasingly nervous about the prospect of even harsher medicine from the Fed to take the sting out of inflation.

Thesank 876 points or 2.8%. The Nasdaq was down by 4.7% and has tumbled more than 10% in the past two trading sessions.

The broader S&P 500 fell 3.9%. That index is now more than 20% below its all-time high set in January, putting stocks in a bear-market.

After raising rates by a half point in May — an action the Fed hadn't taken since 2000 — Chair Jerome Powell pledged more of the same until the central bank was satisfied that inflation was under control. At that point, the Fed would resume standard quarter-point hikes, he said.

"After holding their breath for nearly a week awaiting the US CPI report for May, investors exhaled in exasperation as inflation came in hotter than expected," Sam Stovall, chief investment strategist at CFRA, said in a note to clients Monday morning.

Stovall said the risk of larger hikes dragged the markets lower Monday.

Investors fear two outcomes, neither of them good: Higher rates mean bigger borrowing costs for businesses, which can eat into their bottom lines. And overly zealous action from the Fed could unintentionally plunge the US economy into a recession, especially if businesses start laying off workers and the red-hot housing market crumbles.

There's no sign that the job and housing markets are in danger of collapse, although both are cooling off somewhat.

In an interview with CNN's Fareed Zakaria Sunday , former Fed Chair Ben Bernanke said a US recession remains possible. But Bernanke said he had faith that Powell and the Fed could achieve a so-called soft landing, the elusive outcome in which the central bank can cool the economy down to get inflation under control without slowing it down so much that it enters a recession.

"Economists are very bad at predicting recessions, but I think the Fed has a decent chance — a reasonable chance — of achieving what Powell calls a soft-ish landing, either no recession or a very mild recession to bring inflation down," Bernanke said.

Analysts appeared to move beyond a "buy the dip" mentality on Monday, signaling that they don't see markets recovering quickly.

"Valuations aren't much cheaper given rising interest rates and a weaker earnings outlook, in our view," wrote strategists at BlackRock in a Monday notes. "A higher path of policy rates justifies lower equity prices. Plus, margin pressures are a risk to earnings."

BlackRock will remain neutral on stocks for the next six- to 12-months, the strategists said.

Bears and bulls

The S&P 500 closed in a bear market, so the bull run that started on March 23, 2020 has come to an end. But, because of the tricky way these things are measured, the bear market technically began on January 3, when the S&P 500 hit its all-time high.

That means the latest bull market lasted just over 21 months — the shortest on record, according to Howard Silverblatt, S&P Dow Jones Indices senior index analyst. Over the past century, bull markets have lasted an average of about 60 months.

The shortest bull market followed the shortest bear market, one that lasted just over a month — from February 19 to March 23, 2020. Bear markets historically last an average of 19 months, according to Silverblatt.

Stocks briefly fell into a bear market on May 20, although a late-day rally rescued the market from closing below that threshold for the first time since the early days of the pandemic.

The tech-heavy Nasdaq has been in a bear market for some time and is now more than 32% below its all-time high set in November 2021. The Dow is still some way from a bear market. It has fallen about 16% from the all-time high it reached on the last day of 2021.

-- CNN Business' Nicole Goodkind contributed to this report

Dow tumbles 1,160 points in worst trading day since June 2020 - CNN

New York (CNN Business) The old joke goes like this: Two friends are at a resort and one says, "The food here is really terrible." The other replies, "And the portions are so small!" Today, it's investors who dislike the taste of the Federal Reserve's interest rate hikes — but seemingly want more anyway.

Dow INDU S&P 500 SPX Markets have plummeted over the past month as the Federal Reserve telegraphed that it would regularly hike interest rates by half a percentage point for the foreseeable future to combat persistent inflation. On Wednesday, theshed more than 1164 points, or 3.6%, its biggest loss since 2020. The broader market lost 4%, putting theon the precipice of bear market territory. The Nasdaq Composite lost 4.73%.

Now, investors are asking for more. They're calling for a three-quarter-point rate hike at the conclusion of the Fed's June meeting, despite Fed Chair Jerome Powell's assurances that an increase that high isn't on the table.

Bank of America analysts wrote in a note that they fear there will soon be a wage-price spiral in the US because of risks that "the Fed hikes too little." The current market reaction, they said, suggests that "investors see the Fed as moving too slowly on the inflation fight: a 75 [basis point] hike might have been feared but it appears it would have been preferred."

Nomura Securities has predicted that the central bank will hike the fed funds rate by three-quarters of a point in June and July after the half-point rise in May.

Premarket stocks: Netflix finally told investors what they want to hear ...

A version of this story first appeared in CNN Business' Before the Bell newsletter. Not a subscriber? You can sign up right here . You can listen to an audio version of the newsletter by clicking the same link.

London (CNN Business) It wasn't long ago that Wall Street would have bristled at such grim news out of Netflix: Between April and June, the company lost 970,000 subscribers .

But investors aren't freaking out about the number of customers bailing from the service. In fact, they're cheering.

What's happening: Shares ofare up more than 6% in premarket trading on Wednesday after the company reported its latest results. The simple reason? It could have been so much worse.

"It was a 'less-bad news is good news' quarter," analysts at Bespoke Investment Group said in a note to clients.

Breaking it down: Netflix had already pushed expectations as low as it could, projecting that it would lose 2 million subscribers last quarter after shedding 200,000 in the first three months of the year. That created room for a positive surprise.

"We're talking about losing 1 million instead of losing 2 million," Chairman Reed Hastings said on a call with analysts. "So our excitement is tempered by the less bad results."

Netflix's most substantial subscriber loss came from its biggest market, the United States and Canada, where the streamer said it lost 1.3 million users in the second quarter.

That was offset by increased subscriptions elsewhere, a sign the company's investment in foreign language programming is paying off. The release of the fourth season of the wildly popular show "Stranger Things" also provided a boost.

Looking ahead: Netflix still has work to do to convince investors that it's on the right track. Its stock is down almost 67% year-to-date. Other tech firms, like Google parent Alphabet and Facebook's Meta are off 21% and 48%, respectively. The S&P 500 is 17% lower.

That will mean making major changes to the business. Netflix, partnering with Microsoft, is racing to develop a new lower-priced option that will be supported by ads, an attempt to scoop up customers that are watching their wallets as inflation bites. It's expected to launch early next year.

It's also looking at clamping down on password sharing. The company estimated that 100 million households use Netflix but aren't paying for it directly.

"We know this will be a change for our members," it told shareholders. "Our goal is to find an easy-to-use paid sharing offering that we believe works for our members and our business that we can roll out in 2023."

Rich Greenfield, an analyst at LightShed Partners, thinks there's significant room for Netflix's pivot to advertising to be a success.

"Netflix's advertising opportunity is REAL and directly tied to its enormous time spent vs. all other streaming services," he tweeted

But engineering this big of a move won't be easy. Netflix's entrance into the ad space will be complicated. Competition for viewers among streaming services is tight. And if a large batch of subscribers downgrades to the lower-cost version to save money, it would hurt revenue even as new users sign up.

"We urge caution to the belief that Netflix will be able to use advertising to grow revenue in a vacuum," Bank of America analysts said in a report published late last month. "The advertising ecosystem is large, complex, costly, and its competitors using ads have a several-year lead on them."

Crypto is starting to make a comeback. Will it last?

It's been an absolutely brutal year for investors in bitcoin and other cryptocurrencies.

The numbers: Bitcoin has lost more than half its value in 2022. Now hovering around $23,500, the price of a single bitcoin has plunged more than 65% below last year's all-time high of nearly $70,000.

The value of all crypto coins has tumbled from about $2.2 trillion at the end of 2021 to just above $1 trillion.

Bitcoin, the world's top cryptocurrency, makes up about 42% of the total market, but 2022 has been just as terrible for the owners of other crypto-related assets, such as Coinbase. The brokerage's stock has plummeted 74% so far this year. Shares of rival Robinhood have lost half their value.

That said: There are hopes that the worst for crypto might be over as risk appetite shows early signs of returning to the market, my CNN Business colleague Paul R. La Monica reports.

Bitcoin has gained more than 15% in the past week. Two other top coins have surged even more. Solana is up more than 35% in the past seven days while ether, the second-most valuable crypto, has climbed nearly 45%.

Coinbase has rallied 22% this week. Software company MicroStrategy, which had nearly 130,000 bitcoins on its balance sheet at the end of June, has soared 25%.

Note of caution: The market's mood has been fickle. The CNN Business Fear & Greed Index has been improving but remains in "fear" territory.

And while major players like exchange FTX are on solid footing, vulnerable firms could continue to come under pressure. Crypto lender Celsius was forced to file for bankruptcy earlier this month.

"We will see a longer-term rally in the digital assets sector, but I wouldn't get too excited yet," said Joel Kruger, market strategist at LMAX Group. "This is still an emerging market."

Twitter scores a win against Elon Musk

Twitter TWTR is getting its wish for a speedy resolution as it tries to compel Elon Musk to stick to the terms of their $44 billion takeover agreement.

In an early victory for the company, a judge on Tuesday ruled that the company's lawsuit should go to a five-day trial in October.

Twitter initially requested an expedited four-day trial in September, looking to limit uncertainty for its shareholders and employees and fallout for its business. Musk's legal team opposed the motion.

Digging in: The hearing featured sharply worded arguments from both sides, setting the stage for a contentious legal battle. Twitter's lawyer at one point referred to Musk as a "committed enemy."

"Musk has been and remains contractually obligated to use his best efforts to close this deal," said William Savitt, Twitter's lead counsel. "What he's doing is the exact opposite. It's sabotage."

Musk lawyer Andrew Rossman pushed back, saying that Musk "doesn't have an incentive to keep this hanging for a long time." He noted that the billionaire remains one of Twitter's largest shareholders. Musk's team had proposed the case go to trial early next year, which it said was still "an incredibly rapid and sensible schedule."

Investor insight: Twitter shares climbed almost 3% on Tuesday. They're up almost 16% in the past week, though they're still well below the price of $54.20 apiece that Musk agreed to in April.

Up next

Alcoa AA CSX CSX Las Vegas Sands LVS SL Green Realty SLG Tesla TSLA United Airlines UAL andreport results after US markets close.

Also today: Existing US home sales for June arrive at 10 a.m. ET.

Coming tomorrow: The European Central Bank is expected to begin raising interest rates for the first time in 11 years.

Nasdaq closes month near 14-year low as recession fears grow ...

New York (CNN Business) US stocks plunged on Friday, with the Nasdaq marking its worst month since October 2008 and the S&P notching its worst month since March 2020 at the onset of the Covid pandemic.

Amazon AMZN The tech-heavy Nasdaq fell 4.2% on Friday, dragged down by, which dropped nearly 15% after it missed earnings expectations.

The S&P 500 shed about 3.6% on Friday, while the Dow dropped about 940 points, or 2.8%.

The most closely watched inflation reading released Friday — the core personal consumption expenditures price index — rose 5.2% from a year ago, spelling more trouble for the economy.

The Nasdaq fell around 12% this month, the S&P 500 lost more than 7% and the Dow was off by nearly 4%.

Read More


2021 pop culture moments: Britney Spears, Jennifer Lopez, 'Jeopardy!'

Pop culture this year saw more than its fair share of controversies, tragedies and stunning revelations.

The loss of cultural icons including Virgil Abloh, Stephen Sondheim, DMX, Ed Asner and Prince Philip were devastating, as were the "Rust" film set shooting and Astroworld concert incident. Celebrities shared shocking news, from Prince Harry and Duchess Meghan's Oprah Winfrey interview to Jennifer Lopez and Alex Rodriguez's breakup.

But this year was not without cause for hope: COVID-19 vaccines became widely available to the public, and celebrities rallied to encourage people to get vaccinated to help return to a more normal world. The return to big Hollywood events like the Met Gala marked the return of over-the-top fashion moments, and award shows brought big milestones such as Beyoncé becoming the most decorated woman in Grammys history and Chloé Zhao becoming the first woman of color to win an Oscar for best director.

And there were the shows, films and albums that had fans enthralled: "Squid Game," "Ted Lasso," Olivia Rodrigo's "Sour," Lil Nas X's "Montero," Adele's "30," Taylor Swift's rerecorded "Fearless" and "Red" albums, the "Friends" reunion and Daniel Craig's long-awaited final run as James Bond in "No Time To Die," to name a few.

These 12 moments helped to define the world of entertainment in 2021:

Joe Biden's star-studded inauguration

Joe Biden was sworn in as 46th president of the United States on Jan. 20. Despite security concerns in the days after the Jan. 6 Capitol riots, Biden's swearing-in and inaugural ball were flooded with performances and appearances from A-list stars. To name just some: Lady Gaga, Jennifer Lopez, Tom Hanks, Bruce Springsteen, John Legend, Demi Lovato, Lin-Manuel Miranda, Foo Fighters, Tim McGraw, Kerry Washington, Justin Timberlake, Katy Perry, Yo-Yo Ma, Kumail Nanjiani, and Cher.

Review:Earnest, cheesy and explosive: Joe Biden's inauguration concert hit the right notes

Biden's inauguration marked a return of the connection between the White House and Hollywood – though Trump has Hollywood ties himself, the former president often skipped celebrity-filled events usually attended by the sitting president, including the Kennedy Center Honors and White House Correspondents Dinner.

More:Amanda Gorman, the youngest inaugural poet in US history, calls for unity on Inauguration Day

Stars rally to encourage COVID-19 vaccinations

Major celebrities partnered with health officials, companies or just plain shared on their own social media accounts to get the word out about COVID-19 vaccines as they became widely available in the winter and spring of 2021. Everyone from Martha Stewart to John Legend and Olivia Rodrigo shared their own vaccine experiences in an effort to inspire others to follow suit and quell skepticism.

Despite medical professionals emphasizing that COVID-19 vaccines are safe and effective, misinformation kept many Americans from getting their shots.

More:Duchess Kate, Ellen DeGeneres and more celebs who got the COVID-19 vaccine

Harry and Meghan stun with bombshell Oprah interview

Prince Harry and Duchess Meghan shocked the world in March with a no-holds-barred interview with Oprah Winfrey that released bombshell after bombshell about the struggles that led them to leave their positions as senior members of the royal family. Among the biggest details: Meghan's thoughts of suicide while in the palace; Harry's strained relationships with his brother, Prince William, and father, Prince Charles; and someone in the palace raising "concerns" about how dark their son Archie's skin might be.

Not only did the interview prompt a rare response from the queen, it got the rest of the world talking about the pressures of royal life, racism in the press and mental health.

'I didn't want to be alive anymore':Duchess Meghan opens up in Oprah interview, more major moments

J.Lo and A-Rod break up; Bennifer 2.0 begins

The world of celebrity relationships was rocked when Jennifer Lopez and Alex Rodriguez announced (and then unconfirmed and reconfirmed) their breakup in the spring. The Hollywood power couple got engaged in March 2019 and planned to tie the knot in Italy in June 2020 before COVID-19 shut the world down.

Lopez rebounded over the summer with a highly publicized return to ex Ben Affleck, with whom she was engaged in the early aughts. As sad as some fans were to see the relationship end, many were plenty intrigued by the return of Bennifer, which helped usher in a new era of paparazzi photo obsessions.

More:Ben Affleck calls Jennifer Lopez romance 'a great story': See their relationship timeline

Deeper dive:Lil Nas X, Jennifer Lopez, Grimes and the enduring appeal of celebrity paparazzi photos

Queen Elizabeth's 'strength and stay,' Prince Philip, dies at 99

Big royals news continued this year. Prince Philip, the Duke of Edinburgh and husband to Queen Elizabeth, died April 9 at age 99 after a monthlong stay in hospital for treatment of a heart condition and an infection. He was married to the queen for 73 years, making him Britain's oldest and longest-serving royal spouse in 10 centuries.

Obituary:Prince Philip, Duke of Edinburgh, husband of Queen Elizabeth II, dies at 99

Most British historians and commentators believe Philip was one of the keys to the queen's enduring success. The queen herself famously described him as her "strength and stay."

Music loses a legend: DMX dies at 50

Rap legend DMX died April 9 at age 50 after he was rushed to the hospital days before and put on life support after suffering a heart attack. The "Ruff Ryders' Anthem" rapper, known for being a pinnacle in the '90s and 2000s hip-hop scene, was Grammy-nominated for songs like "Party Up (Up In Here)" and "Who We Be."

Obituary:Rap legend DMX, a pinnacle of the '90s and 2000s hip-hop scene, dies at 50 after heart attack

His loss was mourned widely and drew major crowds to a memorial later that month at Brooklyn's Barclays Center, where Kanye West's Sunday Service Choir and Ruff Ryders music label members including Eve, Swizz Beatz, Drag-On and founding member Joaquin "Waah" Dean paid powerful tributes.

'He will rest in peace': Nas, Eve, Swizz Beatz, more honor DMX at emotional memorial service

'Jeopardy!' picks Alex Trebek's replacement, prompting controversy

When longtime "Jeopardy!" host Alex Trebek died last November, producers refrained from immediately naming a permanent replacement.

Instead, they welcomed a grab-bag of big names from TV host Katie Couric to actor LeVar Burton to "Jeopardy!" champ Ken Jennings to guest-host before they named show producer Mike Richards and "Big Bang Theory" Mayim Bialik as new permanent hosts – until some of Richards' past offensive comments were resurfaced and resulted in his exit as host (and later as executive producer).

Jennings and Bialik are scheduled to share hosting duties into 2022 through the end of the season.

More:The best and worst 'Jeopardy!' guest hosts, from Mike Richards to Joe Buck

R. Kelly found guilty of sex trafficking

R&B star R. Kelly was convicted in New York in September on all nine counts of sex trafficking and racketeering after a six-week-long trial featuring graphic testimony from dozens of witnesses. The charges dated back decades and stemmed from six accusers, including the late singer Aaliyah.

Original story:R&B star R. Kelly found guilty on all counts in New York sex trafficking trial

Kelly's legal case was one of the biggest to come out of the #MeToo movement and sent a powerful message to survivors of sexual violence that their voices can be heard.

More:R. Kelly has been found guilty of sex trafficking. Now what happens?

Dave Chappelle's Netflix special faces backlash for anti-trans comments

Dave Chappelle's October Netflix standup special, "The Closer," featured comments about the transgender community that sparked heavy backlash. The comedian sided with J.K. Rowling on comments the "Harry Potter" author made two years ago, when she conflated sex with gender and defended ideas suggesting that changing one's biological sex was a threat to her own gender identity. His special was met with criticism from trans advocates, Netflix employees and students at his former high school in Washington, D.C., which still plans to name a theater after Chappelle.

More:Dave Chappelle is accused of ‘punching down’ in 'The Closer.' How can comedy go up from here?

Trans advocates were quick to point out that Chappelle's material, even if he considers it a joke, can cause serious harm to the community. The controversy raised debates about the concepts of "punching up" versus "punching down" in comedy.

Opinion:Netflix's support of Dave Chappelle is setting a dangerous precedent. Here's why.

Alec Baldwin fatally shoots cinematographer on 'Rust' movie set

Alec Baldwin was rehearsing on the set of indie Western drama "Rust," a film he was producing and starring in, on Oct. 21 with a prop gun when the weapon went off, killing cinematographer Halyna Hutchins and injuring director Joel Souza.

The shooting, which Baldwin has called the worst thing to happen to him, prompted what experts called a "breakthrough moment" in calls for gun safety on film and TV sets.

And:5 biggest mysteries still surrounding the 'Rust' movie-set shooting involving Alec Baldwin

Britney Spears’ conservatorship ends after 13 years

More than 13 years after Britney Spears was placed under a conservatorship, a judge in November ruled to bring it to an end. The decision followed a high-profile year for the pop icon, 40, whose fame was the subject of a slew of documentaries and launched her fans' #FreeBritney campaign to new heights.

For Spears, the ruling marks the beginning of a new chapter of her life free from answering to her conservators. For the rest of the world, it brought a new understanding and scrutiny of conservatorships.

Britney Spears is free. What going 'from no control to full control' entails, according to experts

And:Britney Spears turns 40 after a whirlwind year of #FreeBritney, paparazzi and the end of her conservatorship

Travis Scott's Astroworld concert turns to tragedy

A crowd surge at Travis Scott's November Astroworld concert in Houston that pushed concertgoers toward the stage, crushing and trampling fans, led to 10 deaths and scores of injuries. The Houston-native rapper, known for giving high-energy performances and encouraging rowdy crowds, came under fire for continuing to perform on stage while chaos ensued in front of him. Later investigations revealed that the Houston police chief had expressed crowd safety concerns to Scott hours before his show took a fatal turn.

"I feel like they’re pointing the finger at me because it's my festival and I am who I am, and maybe (there's) not a lot of understanding going on," Scott told Charlamagne Tha God in his first interview after the concert, published Dec. 9. "I’ve shown through actions that's not my character."

Travis Scott gives first interview since Astroworld:'My heart wasn’t there to be a villain'

What went wrong at Astroworld? Expert: It took 'everything going wrong, like dominoes'

Contributing: Maria Puente, Rasha Ali and Cydney Henderson