Netflix lost nearly 1 million subscribers in the most recent quarter, the latest evidence that the playback giant is being separated from rivals and running out of space to grow overseas.
Still, it was better than the loss of 2 million subscribers it had predicted, reports the New York Post.
The Los Gatos, California streamer said he expects to return to growth during the current quarter, citing the launch of the first part of its successful program. Strange things Season 4.
Shares of Netflix, which have fallen about 67% this year due to concerns about future growth, rose 7% in trading hours.
Last quarter, Netflix shocked the media world when it lost 200,000 subscribers during the first quarter and predicted that the bleeding would continue.
The streaming giant blamed password sharing, increased adoption of connected television and slow economic growth, among other things. He said it would crack down on account sharing and add a lower price level that supports advertising to help increase its subscriber base, which totals nearly 221 million global subscribers.
Experts warn that the company will “fight” to maintain market dominance as the number of competitors rises sharply.
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On Tuesday, the company said it lost 970,000 subscribers in the second quarter, less than Wall Street’s expectation of 1.84 million.
The company assured investors that it has better control to retain subscribers in the future. “We now have more time to understand these issues as well as how to address them better,” the company said.
During the quarter, Netflix removed some of its workforce, dropping 150 workers in May and another 300 jobs in June. The company also said it reduced its real estate footprint, resulting in approximately $ 70 million ($ 101 million) in compensation costs and an ineffective impairment of $ 80 million ($ 115 million). ) of certain real estate leases related primarily to the size of their right. office footprint.
The world’s largest streamer said it will continue to focus on content, offering high-budget movies to its service instead of cinemas, and offering all its episodes of new shows at once, allowing subscribers to bored.
In the second quarter, Netflix said earnings per share reached $ 3.20 ($ 4.64).
Netflix noted that the strong U.S. dollar affected revenue, which grew 9% to $ 7.70 billion ($ 11.55 billion). Revenue would have increased 13% without the impact of the change, the firm said.
Wall Street was expecting a BPA of $ 2.96 ($ 4.29) with revenue of $ 8.04 billion ($ 11.65 billion).
In a letter to shareholders, co-CEOs Reed Hastings and Ted Sarandos said the fourth season of “Stranger Things” helped curb some of the subscriber losses.
Only the first seven episodes were released during the second quarter, but they helped curb cancellations as users waited for the last two episodes, released in the current quarter.
The series, starring Millie Bobbie Brown, Finn Wolfhard and Winona Ryder, broke the service record during the biggest premiere weekend and became the most-watched English-language Netflix show in the world, accumulating a great “1.3 billion hours of viewing in its first four weeks.”
The co-CEOS said the fourth season also “aroused interest in past episodes, with the first to third season experiencing a viewing increase of more than five times” over a year ago.
Meanwhile, Netflix said it is firing to introduce its lowest-cost advertising support level in early 2023. The news follows Netflix’s decision to partner with Microsoft in the ad-supported offering.
“We will probably start in a handful of markets where advertising spending is significant,” the co-directors said in their letter to shareholders.
“Like most of our new initiatives, our intention is to deploy it, listen to it and learn from it, and repeat it quickly to improve the offering. So our advertising business in a few years will probably have a look. very different from what it looks like on the first day. “
This article originally appeared in the New York Post and was reproduced with permission.
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