Netflix continued to lose subscribers in the second quarter as the streaming group tried to assuage fears about its business prospects, telling investors it was “confident and optimistic about the future”.
The company lost about 1 million subscribers in the second quarter, a smaller loss than the 2 million it had forecasted would cancel their accounts. It was partly helped by the release of a new season of the hit show Stranger Things.
However, Netflix projected it would gain 1 million subscribers in the third quarter, a slower turn round than the 1.8mn sign-ups that Wall Street analysts had expected.
The results come after Netflix spooked investors in April when it revealed its decade-long subscriber growth had ended, raising questions about the value of entertainment companies scrambling to compete in streaming.
The stumble rippled across Hollywood and prompted a sell-off in shares of big media groups such as Disney and Warner Bros Discovery that triggered a more austere approach to television and movie production in the past few months.
Netflix shares rose by 7 per cent in after-hours trading but are still down nearly 70 per cent since the start of the year. The company has been hit by intensified competition, a more saturated US market and its decision to increase prices at a time when consumers are coping with soaring inflation.
Asia-Pacific was the only region in which the streaming giant added subscribers in the three months to the end of June.
Netflix signed up 1.1 million subscribers in the region while losing 1.3 million in the US and Canada and 800,000 in Europe, the Middle East and Africa.
In a letter to investors on Tuesday, the streaming giant acknowledged that re-accelerating its growth would be “a big challenge” but defended its status as “the leader in streaming”.
The company ended the second quarter with 220.7 million subscribers globally, leaving it well ahead of its rivals. Netflix boasted that it also has more influence on pop culture than its competitors, pointing to higher “Twitter volume” for Stranger Things than for Disney’s Obi-Wan Kenobi television series or Paramount’s Top Gun Maverick film.
Netflix outlined plans to jump-start growth, announcing it would roll out a new payment plan for users who share an account next year.
News Source: Kenyan Wallstreet