Six months after Netflix raised prices on its US streaming plans, the 22-year-old company reported its worst subscriber stumble in a decade. Netflix on Wednesday noted a loss of 130,000 US subscribers in the second quarter of 2019, sending its stock tumbling 13% in afternoon trading.
Analysts credited the fall-off to higher subscription prices—though Netflix also saw half the international subscriber growth it had predicted for the quarter—and Netflix blamed the decline in part on a lackluster content lineup. Looking ahead, the company forecasts a stronger third quarter thanks to new seasons of popular shows like Stranger Things.
But competition is coming fast and furious: Disney and Apple will introduce their streaming services this year, HBO announced its own surprise service last week, and Comcast and AT&T plan to roll theirs out in 2020. That competition also means that some shows that have long lived on Netflix are moving to other platforms. In a letter to shareholders, Netflix noted that its “Disney catalog, as well as Friends, The Office, and some other licensed content” will “wind down over the coming years”—AKA those shows will soon stream exclusively on forthcoming services from Disney’s (Disney Plus), WarnerMedia (HBO Max), and NBCUniversal’s platform, respectively.
Even though Friends and The Office were Netflix’s most-viewed shows in 2018, the company swears it’s not even a tiny bit worried. Netflix noted in its the letter that it has strategically been moving towards “branded exclusive 1st window original content for many years” and that the losses will free up cash for even more originals. “We don’t have material viewing concentration as even our largest titles (that are watched by millions of members) account for only a low single digit percentage of streaming hours,” Netflix noted. “From what we’ve seen in the past when we drop strong catalog content (Starz and Epix with Sony, Disney, and Paramount films, or 2nd run series from Fox, for example) our members shift over to enjoying our other great content.”
Still, Netflix’s subscriber defections marked its most significant loss of US customers since the company split its DVD-mail business from its streaming business in 2011, a move that also raised prices, and resulted in a loss of 800,000 US accounts. Interestingly, Netflix still has just over 2.4 million DVD subscribers.
For Android Mobile users Ilwareed Online has an App available on Google Play Store, with this App you can get the latest News and Political Analysis every minute.
Download Ilwareed Now.
Follow us on Twitter #ilwareed and Facebook #ilwareedonline