Netflix Stock Prices Up Despite the Service Losing Close to a Million Subscribers

Netflix has reported a loss in subscribers for the second quarter in a row, but managed to breathe a sigh of relief, recording revenue growth in a month characterised by better-than-expected results.

Credit: Netflix

The streaming service on Tuesday, 19 July disclosed that it lost over 970,000 subscribers between April to June of 2022 – a number that’s far lower than its forecast of two million.


In the quarter before, it reported a loss of over 200,000 subscribers, marking the first time the service has lost subscribers in over a decade. The company’s share prices, as a result, took a steep plunge and lost some investor confidence. The decline in subscribers this year was a stark contrast to the seemingly unbridled growth the service enjoyed in the first half of 2020 when it added over 26 million new subscribers.


Despite what has been a rough year, Netflix saw its revenue grow by 9% from the same time last year to $7.9 billion. It earned $1.4 billion during the quarter, equal to about $3.20 per share, which is 6% higher than last year's results.


Share prices for Netflix also went up during the extended trading hours after the report was released, driven largely by the "less bad results", as the company's CEO Reed Hastings puts it, and the optimistic outlook for the next quarter.

Credit: Netflix

Netflix management believes their subscriber troubles are now behind them, forecasting that they'll add over a million new subscribers next quarter. As to how they plan to do this, they said, for now, the priority is to optimise revenue growth and expand monetisation options.


The former involves clamping down on password-sharing between subscribers living in different households, offering them a paid add-on if they want to keep sharing a single subscription. The latter, meanwhile, involves introducing new lower-tier subscription options, including the recently announced ad-supported tier, to suit different viewing preferences and budgets. Both initiatives are expected to roll out starting next year.


Last week, Netflix announced it has partnered with Microsoft to bring the ad-supported tiers to the platform.

 
  • Netflix has reported a loss in subscribers for the second quarter in a row but recorded revenue growth in a month characterised by better-than-expected results.

  • The streaming service lost over 970,000 subscribers between April to June of 2022 – a number that’s far lower than its forecast of two million.

  • Despite what has been a rough year, Netflix saw its revenue grow by 9% from the same time last year to $7.9 billion.

  • Share prices also went up, with Wall Street seemingly cheering the company on as it looks to end the contraction of subscribers next quarter.

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