American subscription streaming service and production company Netflix lost almost one million subscribers from April through June. Although, the company averted the worst-case scenario projected. Netflix is having a terrible year. Due to losing subscribers, its stock price is down about 70 percent so far. In addition, the company also laid off hundreds of employees.
Next year, the company plans to launch an ad-supported plan. With this, it aims to finance the investments necessary for it to maintain its position at the top as the leader. In April, Netflix warned that it is expecting to lose 2 million customers in the current quarter. This announcement shocked Wall Street, which raised questions about its long-term growth expectations. For the second quarter, the defections are not as steep as expected. The company is looking to add around 1 million new customers from July through September. Wall Street analysts were expecting 1.84 million, According to analysts polled by Refinitiv, 1.84 million people are expected to subscribe.
The company is looking to gain 1.94 subscribers from July through September
In a letter to its shareholders, the company said that it had further examined and looked into the slowdown. It further said that it attributed the slowdown to several factors such as password sharing, competition from other services, and a bad economy. Netflix is still the leader of the streaming service industry with around 221 million subscribers from all around the world.
In April, the company said it was dealing with the decrease in the number of subscribers by planning a crackdown on password-sharing and launching the less-expensive tier with advertising. Last week, Netflix announced Microsoft Corp as its technology and sales partner for the ad-supported offering. Netflix also said that the strong U.S. dollar hit revenue, which grew 9%. Revenue would have increased by 13% without the foreign exchange impact, the company said.
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