Netflix has become a ‘necessity’ for entertainment in modern times. But, recently, the company has been losing subscribers and business. This spiraled into the video-streaming service laying off more than 300 employees.
However, recent statistics from Netflix show that it might not be as bad as it seems. The company reported losing 970,000 subscribers in the second quarter of 2022. It sounds like a lot, doesn’t it? But the digit is far less than what Netflix had initially projected, around two million. So, while Netflix has lost subscribers, it is still a ‘success,’ albeit unconventional.
Netflix loses (more) subscribers
The most recent quarter showed the biggest subscriber loss the company has experienced in its history, but it still is a win for Netflix since the numbers came in much lower than expected.
The streaming giant also reported that it would add one million subscribers in the third quarter. There was also good news for investors after the shares jumped as much as 8% in after-hours trading.
The fiasco started in April 2022, when the company disclosed that it had lost 200,000 subscribers, eventually leading to a drop in its share price. Its biggest subscriber loss was from the United States and Canada. The second quarter came with some relief, as the company averaged a profit of $1.4 billion, an increase in the year-earlier quarter. Revenue jumped by 8.6% year by year to $7.9 billion.
In a letter to its investors, Netflix claimed it’s in a position of strength, as the company has generated over $30 billion in revenue and $6 billion in operating profit in 2021. It boasted of growing free cash flow and a solid balance sheet.
More details
With everything going on, doubts about the company and its future grew. Investors were pleased to find that the losses weren’t as bad as predicted, and part of the reason is Stranger Things.
The show’s fourth season, which came years after the third season (released in 2019), had viewers very excited. Stranger Things was viewed for 1.3 billion hours in its first four weeks, making it Netflix’s biggest English language show ever.
Although the company’s reports showed losses, which it needs to take care of, it is still a sigh of relief. Netflix has breathing room, especially after recently experiencing a drop in the stock market and negative publicity.
