This is the first time the company has lost subscribers since 2011.
2019 is a year of highs and lows for Netflix. The company started the year coming off of a 52-week low, but its shares rebounded in the months since.
The company has dealt with announcements from Disney and Apple of new rival streaming services. And most recently, it learned it will lose two of its most popular shows: “The Office” and “Friends.”
On Wednesday, Netflix saw its shares fall more than 10% after the company released its second-quarter earnings report. The earnings report showed that the company lost U.S. subscribers and failed to grow its international customer base.
A Closer Look at Earnings
A key factor in Netflix’s growth is whether the company can boost its international presence. It made some headway on this during the second quarter but fell short of its goal. The company planned to bring on 4.81 million international subscribers but only gained 2.83 million.
But most disappointing was the unexpected drop in domestic subscribers. Investors expected Netflix to add 352,000 new subscribers during the second quarter. Instead, the company lost 126,000 subscribers.
This is the first time in eight years the company lost subscribers. Netflix said the loss was likely due to a weak content lineup and a pullback because its first-quarter growth was so strong. And subscriber loss seemed to be the heaviest in areas where the company increased its prices.
What’s Ahead for Netflix?
It wasn’t all bad news for Netflix since the company’s planning for stronger third-quarter results. The third season of “Stranger Things” came out at the beginning of July — that’s one of the company’s most popular shows.
And the company will have a much stronger content lineup in the third quarter, including new seasons of “Orange Is the New Black” and “The Crown.” Netflix even put a positive spin on the loss of “Friends” and “The Office,” calling it an opportunity to spend more money on original content.
The company’s shares are up more than 20% in 2019 but still down more than 10% from a year earlier. Only time will tell if this earnings report was just a blip on the company’s radar or a sign of what’s to come.
