Netflix Loses More Subscribers, But Not As Many As Feared

For the second straight time in the streaming company’s modern history, Netflix on Tuesday reported a drop in subscribers in its most recent quarter. But rather than the 2 million accounts they forecast would be dropped, Netflix said it only shed 970,000 subscribers this time.

What’s more, Netflix predicted it would gain subscribers — as many 1 million — during the upcoming three months. Wall Street embraced the news, sending Netflix shares up about 7% in after-hours trading immediately following the announcement.

In a letter to shareholders, Netflix said: “Our challenge and opportunity is to accelerate our revenue and membership growth.”

But it likely can’t do so without compelling content, especially as rival streamers — like Disney Plus and HBO Max —spend billions on programming and lure millions of new subscribers.

The new season of “Stranger Things” attracted viewers, with 1.3 billion hours of the series watched in its first month. But Netflix still doesn’t have a new breakout hit like last year’s “Squid Game.”

When Netflix announced earlier this year that it had lost 200,000 subscribers in the first quarter of the year — the first such setback until Tuesday’s news —its stock price plunged. The company subsequently laid off hundreds of workers, said it would focus on creating better rather than more programming, and started planning for a separate, advertising-supported platform.

Netflix said on Tuesday that the lower-priced option would debut in “a handful of markets” in the months ahead.

“Like most of our new initiatives, our intention is to roll it out, listen and learn, and iterate quickly to improve the offering,” the company told shareholders. “So, our advertising business in a few years will likely look quite different than what it looks like on day one.”

Netflix also said it will continue to crack down on password sharing, where tens of millions of households watch the service without paying.