Netflix has reached the end of the streaming services road, where there are no more subscribers to acquire as the competition closes in.

On Tuesday afternoon, the streaming and production services giant told Wall Street that it lost 200,000 subscribers in Q1 2022 and lowered its forecast for 2022. "Streaming is winning over linear, as we predicted, and Netflix titles are very popular globally," said the company to stockholders. "However, our relatively high household penetration - when including the large number of households sharing accounts - combined with competition, is creating revenue growth headwinds. The big COVID boost to streaming obscured the picture until recently."

While high household penetration and growing competition should be blamed for losing Netflix's subscribers, pricing must have played a role. A couple of months ago, the video-streaming giant announced that it is raising prices for its U.S. and Canadian subscribers. Depending on the plan, the hike was between $1 to $2 per month, high enough to make the difference for subscribers who live paycheck to paycheck in an inflationary environment.

Still, the loss of subscribers came as a big surprise to Netflix's Wall Street bulls, which have been used to the company adding subscribers quarter after quarter for more than a decade.

"The bull case for stocks like Netflix involves essentially perpetual growth with additional subscribers joining every quarter," says David Keller, Chief Market Strategist at StockCharts.com. "Today's report shows a limit to that long-term bullish thesis, as Netflix underwhelmed with a net loss of 200,000 subscribers instead of the 2.5 million they had projected. In addition, the increased competition from other streaming providers could limit the upside potential for the stock, and today's numbers could indeed put significant downside pressure on the stock price."

Netflix's stock was trading at around $260 per share in after-hours, but it could drop further, according to Keller. "From a technical perspective, NFLX had been bouncing off support around $340," says. "Given the weakness in this week's report, this opens up downside price targets around $250, putting NFLX back to its 2019 lows." Perhaps, even lower. That would depend on whether the company finds other ways to grow its revenues.

But it doesn't seem likely even by its estimates, which hold operating margin steady. "While we work to reaccelerate our revenue growth - through improvements to our service and more effective monetization of multi-household sharing - we'll be holding our operating margin at around 20%," said the company to shareholders on Tuesday.

"Key to our success has been our ability to create amazing entertainment from all around the world, present it in highly personalized ways, and win more viewing than our competitors. These are Netflix's core strengths and competitive advantages. Together with our strong profitability, we believe we have the foundation from which we can both significantly improve, and better monetize, our service longer term."

In addition, Netflix's revenue growth and operating margin will depend on churn rates. Deloitte's recent Digital Media Trends Survey U.S./Global Streaming Churn Rates say the average churn rate in the U.S. across all paid streaming video-on-demand (SVOD) services remains at 37%. However, the average overall churn rate in the UK, Germany, Brazil, and Japan is closer to 30%. But these rates could become higher if food and energy inflation continues to take a big bite out of household budgets.

Meanwhile, Netflix's subscriber loss could be a game-changer for the streaming industry, which is reaching maturity. "Subscriber growth has always been an important metric in the streaming industry, so it will be interesting to see who else loses subscribers," says Anthony Denier, CEO of Webull.

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