Streaming giant, Netflix say they have lost 970,000 subscribers in the last quarter, a good result for the company who predicted to lose 2 million subscribers.
The news comes as Netflix’s stock tumbled more than 65 percent in the past year following customer dissatisfaction over high subscription costs and also spring up of other cheaper streaming services like Disney+, Hulu, Amazon Prime and HBO.
During the first quarter, when Netflix lost 200,000 subscribers and spurred Wall Street and Hollywood to reevaluate the economics of the streaming business, the company warned that it expected to lose an additional 2 million subscribers during Q2. Though the quarter still ended with a net loss in subscribers, the streaming giant is projecting it will add 1 million subscribers in Q3.
Netflix on Tuesday, July 19 said it now has a total of 220.67 million subscribers, a decrease from the 221.64 million reported at the end of Q1. Revenue hit $7.97 billion for the second quarter, representing a roughly 8 percent year-over-year growth in part due to a “stronger U.S. dollar,” according to Netflix’s letter to shareholders, while net income landed at $1.44 billion.
By region, Netflix saw the most losses in the U.S. and Canada, despite major English-language series like Stranger Things‘ fourth season premiering during the quarter. US and CANADA saw a 1.3 million loss in subscribers, dropping to a total of 73.3 million paid subscribers in the region.
Europe, Middle East and Africa region also saw a decline in subscriber growth during Q2, losing 770,000 subscribers, while Latin America saw a modest addition of 1,000 paying subscribers.
The Asia-Pacific region emerged as the strongest contributor to Netflix’s subscriber growth, bringing in 1.08 million subscribers during the quarter.
In the aftermath of its Q1 earnings report, Netflix went into overhaul mode: The streamer implemented several rounds of layoffs, with the most recent resulting in the loss of 300 staffers, which amounted to $70 million in severance costs; reevaluated its film strategy to focus on fewer but better projects, moving away from the low-budget fare; then decided to staft an advertising-supported subscription tier by partnering with Microsoft, which will handle sales and tech for the streaming company.
In its letter to shareholders, Netflix said it planned to release its ad-supported tier “around the early part of 2023.” The offering will likely first roll out in markets where “advertising spend is significant.” The letter continued, “While it will take some time to grow our member base for the ad tier and the associated ad revenues, over the long run, we think advertising can enable substantial incremental membership (through lower prices) and profit growth (through ad revenues).”