Is this really the end of our streaming love affair?

Netflix, the streaming service that gave us Bridgerton and Sex Education, has been at the centre of the week’s biggest stock market drama.

The 37 per cent fall in its shares this week sends out a signal that the cost-of-living squeeze on household budgets is set to play a major role in the fortunes of many companies on both sides of the Atlantic.

This is the time for investors to scrutinise their portfolios to limit the damage from consumer caution amid concerns that other companies could go from ‘growth darling to growth purgatory’ overnight, as US analyst Michael Nathanson of Moffett Nathanson puts it.

Falling flat: Netflix, the streaming service that gave us Bridgerton (pictured) and Sex Education, has been at the centre of the week’s biggest stock market drama

About 200,000 subscribers cancelled Netflix in the first quarter, suggesting that people are monitoring expenditure. The company expects that 2m more subscribers will depart worldwide this year.

In lockdown Netflix came to be regarded as a must-have. It was a stay-at-home star. The share price, now $227, was still as high as $700 in November 2021.

But many former fans have fallen out of love with the streaming service. Fed up with sitting on their sofas, they may prefer to devote any spare cash to eating out or holidays.

Shares in rivals like Walt Disney, owner of Disney+ and Roku, also declined this week, underlining the new quest for stocks with pricing power. Companies that can hold down their own costs and get customers to pay more should prove more resilient to inflation.

Netflix, it seems, can contrive to do neither, a plot twist in its story that shocked many investors, including billionaire US hedge fund manager Bill Ackman, who bought $1.1billion-worth of Netflix shares in January.

At that time I wrote in this column that shocks and surprises lay ahead for anyone backing Netflix. Ackman on Wednesday sold his stake – some of which was held in the Pershing Square investment trust – at a loss of about $400million,…

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