Netflix loses nearly 1M subscribers but beats expectations

Netflix announced that it lost its largest number of subscribers in the last three months on Tuesday, though the figure beat its expectations.

According to the streaming service’s quarterly earnings report, Netflix lost 970,000 subscribers, beating its originally forecast 2 million subscriber loss in an April shareholders letter.

Netflix stock jumped after the release of the better-than-expected earnings on Tuesday. 

But the company, still reeling after a challenging year and growing competition, said it will push forward with plans to add an ad-supported model and features designed to crack down on account sharing. 

Netflix said it is planning to launch an ad-supported tier early next year. The company announced last week it would be partnering with Microsoft as it adds the ad-supported plan for users. 

Netflix said it is also aiming to roll out plans for users to pay to share accounts with others outside their household in 2023. The company started to test some of those features in Latin America earlier this year in an effort to monetize an estimated 100 million households that are using Netflix without paying by sharing passwords with other account holders. 

On the content side, Netflix said it will continue to focus on offering “big movies direct-to-Netflix” and releasing shows that let users “binge watch” without waiting weekly for new episodes. 

Netflix CEO Reed Hastings attributed the better-than-anticipated subscriber loss to success on content release, pointing to the release of “Stranger Things.” 

“If there was a single thing we might say ‘Stranger Things’ but again we are talking about losing 1 million instead of losing 2 million. So our excitement is tempered by the less bad results,” Hastings said on a call about the quarterly earnings.

The fourth season, which was released at the end of May, generated 1.3 billion hours viewed, making it the company’s biggest season of English TV ever. 

The release of the latest season also reignited interest in past episodes, with the first three seasons having a greater than fivefold increase in viewing in the month after the release of the fourth season.