On Tuesday, Netflix announced “better-than-anticipated” results for its second quarterly report, which revealed that the streaming service had only lost about half of the two million subscribers anticipated early this year.
According to a report, around 975,000 subscribers deactivated their membership during the previous three months. The figure was revealed after the service took a significant hit in the first quarter when it lost 200,000 members between January and March.
While Reed Hastings, the firm’s CEO, praised programs like “Ozark” and “Stranger Things” for keeping results below forecasts, the company saw its biggest customer cancellations in 25 years.
“If there were a single thing we could say, it would be ‘Stranger Things,’” Hastings revealed. “But again, rather than losing 2 million, we’re talking about losing 1 million.”
“So, to put it another way,” he continued, “our enthusiasm is tempered by the fact that the results were less awful.”
The video streaming site, which has about 220 million subscribers, stated that increasing revenue is a “significant issue.” The report predicts that the company will acquire another million subs by the third quarter.
“We have been through tough times in the past. We’ve built this firm to be flexible and changeable, and it will be a true test for our high-performance culture.”
On Wednesday, Netflix announced a new collaboration with Microsoft to offer ad-supported subscription services that would interrupt users’ programs in early 2023.
“We’ll likely begin in a couple of key markets where ad spend is high,” the firm added. “Like all of our new projects, we intend to roll it out, listen and learn from customers, and iterate quickly to improve the service.”
In a few years, the firm believes its advertising business will be different than it is now.
Netflix has also started putting new measures in place to limit account sharing, and it already offers a “add extra member” option in Central and South America.
Last quarter, Netflix said it was experiencing a subscriber loss owing to competition from other streaming services and widespread account sharing. With the oncoming global recession, rising inflation, and the Ukraine conflict playing a significant role, Netflix officials stated that as the US dollar strengthens and global currencies weaken, the company’s historical rate of growth might be disrupted in its worldwide market, which accounts for about 60% of its revenue.
So far this year, the firm has dismissed over 450 personnel, and dozens of part-time and contract workers, and lost around 70% of its stock.
Despite these worries, however, Netflix continues to be proud of its success.
On Tuesday evening, Netflix’s stock was valued at more than $200 on Wall Street. Last year, Netflix shares were worth roughly $700. According to a Refinitiv poll, Netflix earnings per share are expected to be $3.20 this year, with revenue of $7.97 billion.
“We’re hopeful and confident about the future,” the firm added.