Should Netflix Be Worried?
Finding the story in Netflix’s latest quarterly earnings report
We’re in the midst of Q2 earnings season. Netflix, obviously one of the heaviest hitters of today, announced earnings last week. It didn’t go very well. While they met expectations in many categories, they fell short on perhaps the most crucial — subscriber growth.
You can read a full breakdown here (paywall) but long story short Netflix added just 2.7 million international subscribers (vs the 5 million that were expected) and actually lost 130K domestic subscribers. It’s the first time since 2011 that they’ve lost subscribers quarter-to-quarter, and it’s rather astounding.
There are plenty of explanations for this. The price increase that Netflix instituted earlier this year is taking the most blame, but it has also been suggested that Netflix simply didn’t have many exciting releases in Q2. Stranger Things, for example, should power some growth in Q3, but there was no such marquee release to lean on last quarter. Perhaps all the news about other streaming services and their impending launches has caused customers to take a hard look at what services they subscribe to, which subsequently resulted in a few Netflix cancellations. Perhaps this is just an odd blip on the scale. After all, it’s just one quarter.
