Netflix Subscriptions Decline in the U.S. for the First Time in Eight Years; the News Follows Price Hike, But Netflix Has a Different Explanation

Jul 17, 2019  •  Post A Comment

“For the first time in eight years, Netflix lost subscribers in the U.S. — dropping a net 130,000 for the second quarter of 2019 — and added nearly 2 million fewer international customers than expected, sending the stock tumbling,” Variety reports. “Paid subscribers grew by 2.7 million, including 2.83 million internationally, almost half that of Netflix’s previous guidance of 5.0 million net adds (300,000 in the U.S. and 4.7 million for the international segment). Netflix had 151.6 million paid streaming subs as of the end of June.”

Shares in the company reportedly fell more than 12% in after-hours trading.

The report notes that the second quarter results include the effects of Netflix’s U.S. price increases, with the Standard two-HD stream plan rising from $10.99 to $12.99 per month. Variety notes that Netflix is also rolling out price increases across Europe, including in the U.K., Spain, France, Ireland and Germany.

In announcing the results, Netflix admitted: “Our missed forecast was across all regions, but slightly more so in regions with price increases.” Even so, Netflix downplayed how much the higher prices contributed to the losses.

“The company said the Q2 subscriber results were the result of a weaker content slate in the quarter, which drove fewer paid net adds than anticipated, and said price hikes also hurt subscriber additions,” Variety reports, adding: “Netflix last reported a drop in U.S. subscribers in Q3 2011, after it split apart its DVD-by-mail and streaming services.”

One Comment

  1. Press and Wall Street are focused on price and Disney competition. But there is something deeper here. Facebook mentions in its report that they have a weaker content slate. Some of their best programs – Orange is the New Black, House of Cards and Stranger Things have ended their runs. Although, this may cause them to add another season or two to Stranger Things. If you look at the programming they have, it is still very strong. But they are not getting the free publicity they did for these previous programs when the service started, especially Orange and Cards; which made them must see, and sold a lot of subscriptions. How many of these programs are you aware of? You, Glow, The Crown, Russian Doll and Ozark are just a few of the really great programs on Netflix. That is the same issue that is hurting the Film business this year. We are in the business, but how many films that are not Disney films, do you know about? The competition isn’t just about content it is about marketing that content. I have not met anyone, including my kids and their friends, who is aware of Crawl, which is one of the best thriller/horror summer movies in years. Booksmart, a smart top comedy, that received almost no publicity. My local theaters are currently dominated by Lion King, Toy Story, Aladdin, Avengers, and Spider-man. Good for Disney and Marvel for having such great marketing. But where is the marketing for the smaller films which are in and out of the theaters in a couple of weeks because no one has even heard of them?

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