Netflix’s Loss: What went wrong and how they can fix it


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Netflix lost 970,000 subscribers in the second quarter. This is a lower loss than the 2,000,000 it forecasted last year. The company plans to announce its lower-cost, advertising-supported service, which it had expected to add about 1 million new subscribers for the 3rd quarter.

Netflix shares rose after the company announced that it had lost fewer subscribers than anticipated during the second quarter.

After its partnership with Microsoft on the ad support offering, Netflix also plans to launch its lower-cost tier of Netflix in early 2023.

The company’s shareholder letter stated that “We are likely to start markets where advertising spending is high.” It will be implemented quickly and we will learn from the new offering and make improvements based on our experiences. Our advertising business will be very different in the next few years than it is now.

Netflix warned investors last quarter it expected to lose about 2 million subscribers. However, Netflix lost only 970,000 in the three months ended June 30, 2017.

These are the results

Refinitiv reports earnings at $3.20, compared to $2.94 According to Refinitiv, revenue was $7.97 billion instead of $8.035 trillion.

According to StreetAccount estimates, global paid net subscribers lost 970,000 subscribers. This compares with 2 million subscribers that StreetAccount had expected.
According to the company, with 220.67 million subscribers at present, net adds are expected to reach 1,000,000 in the third quarter. The company also stated that it expects a turnaround during second half of this year.

Netflix also stated that it is still early in its subscription sharing plans, which it called a paid sharing plan. Netflix said that it is currently testing a feature that will charge a fee to members who share their subscriptions with friends or family members that are not in their home.

The company expressed concern about the impact the stronger US dollar had on its international revenues, which account for 60% of its total revenue. The Federal Reserve raised interest rates to combat inflation and the dollar surge is due to this.

Netflix addressed its slowing revenue growth last quarter. This was due to competition and account sharing.
“We’ve now had more time to understand these issues, as well as how best to address them,” the company said.

It is still focused on content. The company offers big-budget movies on its site rather than in theatres. Subscribers can also access all new episodes at once. The company promoted “Stranger Things” Season 4 as a huge success, not only because of its viewership record, but also because the show was nominated to several Emmys for 2022.

Netflix shares closed Tuesday at just below $200. They traded for $700 last fiscal year.


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