Netflix lost nearly a million subscribers in the last quarter – the latest evidence that the streaming giant is being separated from rivals and lacking room for growth overseas.
Still, it was better than the loss of 2 million subscribers he predicted, reports the New York Post.
The Los Gatos, Calif.-based streamer said it expects to return to growth in the current quarter, citing the launch of the first part of its hit show, stranger things Season 4.
Shares of Netflix, which have fallen about 67% this year on worries about future growth, rose 7% after hours trading.
Last quarter, Netflix shocked the media world by losing 200,000 Q1 subscribers and predicted the bleeding would continue.
The streaming giant blamed password sharing, rising smart TV adoption and slow economic growth, among other things. It said it would crack down on account sharing and add a cheaper tier that supports advertising to help swell its subscriber base, which totals nearly 221 million subscribers worldwide.
Experts warn the company will “strive” to maintain market dominance as the number of competitors rises sharply.
On Tuesday, the company said it lost 970,000 subscribers in the second quarter, less than Wall Street expectations of 1.84 million.
The company assured investors that it has a better grip on subscriber retention going forward. “We’ve now had more time to understand these issues, as well as how best to address them,” the company said.
During the quarter, Netflix laid off some of its workforce, laying off 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 (A$101 million) in severance payouts and an $80 million (A$115 million) non-cash writedown of certain real estate leases primarily related to the proper sizing of its office footprint.
The world’s largest streamer said it will continue to focus on content, bringing big-budget movies to its service rather than in theaters, and offering all of its episodes of new shows at once, allowing subscribers to binge.
In the second quarter, Netflix said earnings per share were $3.20 (A$4.64).
Netflix noted that the strength of the US dollar hit revenue, which rose 9% to $7.97 billion (A$11.55 billion). Revenue would have increased 13% without the impact of exchange rates, the company said.
Wall Street expected EPS of $2.96 (A$4.29) on revenue of $8.04 billion (A$11.65 billion).
In a letter to shareholders, co-CEOs Reed Hastings and Ted Sarandos said the fourth season of “Stranger Things” helped stem some of the subscriber losses.
Only the first seven episodes were released in the second quarter, but they helped slow cancellations as users waited for the final two episodes, released in the current quarter.
The series, starring Millie Bobbie Brown Finn Wolfhard and Winona Ryder, broke the service’s record for biggest premiere weekend and became the most-watched English-language Netflix show in the world, racking up a whopping “1 .3 billion hours viewed in its first four weeks.”
The co-CEO said season four has also “rekindled interest in past episodes, with seasons one through three seeing a more than five-fold increase in viewing” compared to a year ago.
Meanwhile, Netflix said it plans to unveil its lower-cost ad-supported tier in early 2023. The news follows Netflix’s decision to partner with Microsoft on the ad-supported offering. .
“We will likely start in a handful of markets where ad spend is significant,” the co-CEOs said in their letter to shareholders.
“Like most of our new initiatives, our intention is to roll it out, listen and learn, and quickly iterate to improve the offering. what she looks like on day one.”
This article originally appeared in the New York Post and has been reproduced with permission.