Between April and July, Netflix lost nearly 1 million subscribers, BBC writes. The company’s shares rose despite the news they riserose about 8 percent after Tuesday’s announcement, with the broadcasting giant previously forecasting much higher cuts and losses.
In the second quarter, the largest number of cancellations occurred in the United States and Canada, followed by Europe.
While losing 970,000 paying users isn’t usually a good thing, it compares to the 2 million users the company had forecast for the three-month period ending June 30.
When asked what could have prevented a further decline in subscriptions, Reed Hastings, the company’s co-CEO, said, “If you could single out one thing, it would be weird stuff.”
The fourth season of Stranger Things, presented by Netflix in two installments – in June and early July – was really a huge hit and set a viewing record.
Netflix’s subscribers fell for the first time in more than a decade in April, but the number of users is still close to 220 million, making the company still the global leader in the streaming sector.
However, there are more and more competitors, for example Amazon Prime Video and Disney Plus services were launched recently. In addition, Netflix recently raised prices, which may have contributed to the decline in popularity in the United States.
Netflix generated nearly $8 billion in revenue in the second quarter, up 8.6 percent from the same period last year, but the growth rate is slowing and the company expects to slow further. Netflix is counting on 1 million new paying subscribers for the next quarter.
In June, the company announced that it would offer a cheaper package, but that was watered down with ads. Netflix co-CEO Ted Sarandos said in a professional discussion that the new subscription is aimed at those who until now thought it was too expensive and who wouldn’t mind watching commercials. They are also trying to reverse the downtrend by making account sharing more difficult.
As a result of declining subscriptions, Netflix announced another downsizing at the end of June, 300 people, about 4 percent of the workforce, were laid off. This was the second wave of layoffs at the company this year, as 150 workers had previously been laid off.
