Netflix reports largest quarterly loss of nearly one million subscribers

Success of ‘Stranger Things’ season 4 behind ‘better-than-expected’ results for the quarter

Netflix has reported a loss of about 970,000 subscribers in the last quarter — a “better-than-expected” result — according to the streaming giant which projected it could lose about two million users in the three months between April and July.

Although the company’s stocks plummeted by about 37 per cent in April after the projection that it might lose nearly two million subscribers in the following quarter, the less severe loss reported for the period, combined with a better outlook of growth in the July-September period, boosted the streaming giant’s battered stocks up by seven per cent.

Asked what drove the better-than-expected results, Netflix chief Reed Hastings said execution “really well on the content side”, with “lots of titles”, leading to “lots of vieweing”, slowly paid off.

“If there was a single thing, we might say Stranger Things,” Mr Hastings said.

The latest season of the Netflix hit series attracted phenomenal growth in viewership for the platform.

Within the first four weeks, the season generated 1.3 billion hours viewed, making it the company’s biggest season of English TV ever.

“Season four also re-ignited interest in past episodes with season one through three experiencing a greater than five-fold increase in viewing in the month after the release of season four (vs the prior month),” Netflix noted in a letter to its shareholders on Tuesday.

However, the subscriber losses reported by the company on Tuesday were the biggest in its history, with the firm reporting the highest numbers of cancellations of over one million customers from US and Canada, followed by a loss of about 770,00 subscribers in Europe, Reuters reported.

This was however offset by a gain of over one million customers in the Asia/Pacific region.

“We’re talking about you know losing one million instead of losing two million so you know our excitement is tempered,” the Netflix chief said.

The streaming giant reported it currently has about 221 million subscribers, adding that it hopes to add another million in the upcoming quarter.

It said its recent slowdown could be due to a range of factors, including password-sharing, competition, as well as a sluggish economy, and “the impacts of the war in Ukraine”.

Over the last two months, Netflix has been adjusting its business strategy, laying off nearly 450 employees, and announcing it would release a cheaper ad-supported subscription plan, and also clamp down on password sharing.

In its letter to shareholders, Netflix also said it would launch the ad-supported tier, partnering with Microsoft, in the early part of 2023.

“Our lower-priced advertising-supported offering will complement our existing plans, which will remain ad-free,” the company added.

It also noted it is working on a “paid sharing” feature “to monetize the 100m+ households that are currently enjoying, but not directly paying for, Netflix”.