CEO Reed Hastings blamed slower than expected growth on lackluster content and a subscription increase
Netflix didn’t add nearly as many subscribers as the company projected it would in the second quarter of 2019, and saw a loss in US subscribers just because since 2011, when the company separated its DVD mail-order system and streaming platform.
The organization lost roughly 130,000 subscribers in the United States in Q2, and just increased 2.7 million worldwide subscribers, in the wake of anticipating it would include 5 million. Chief Reed Hastings accused the stagnancy of the organization’s price hikes, and an absence of unique substance to get new supporters. The organization founded higher pricing plans in January, perhaps the greatest increment to date. Plan changes went into effect for both new and returning subscribers. As such, paid memberships in the United States were “essentially flat.”
“Our missed gauge was over all districts, yet marginally more so in areas with cost expands,” Hastings wrote in his letter to investors. “We don’t believe the competition was a factor since there wasn’t a material change in the competitive landscape during Q2, and competitive intensity and our penetration is varied across regions.”
The news has prompted a quick stock drop for the organization. Hastings’ letter to speculators contends that the organization’s next two quarters will see development due to new periods of Netflix triumphs like Stranger Things, La Casa de Papel (Money Heist), The Crown, and Orange Is the New Black, which is getting the last season. In any case, the stock drop and Disney, WarnerMedia, Apple, and NBC Universal’s race to make the first “Netflix executioner” might be an indication that trust in Netflix is waning.
Netflix already has a major presence in these spaces, and it’s investing heavily in localized content for specific regions. Other companies haven’t spoken about similar investment strategies in the lead-up to their launches. Netflix executives are planning to pump even more resources into international content development as an effort to stay ahead of the competition.
“We forecast Q3 global paid net adds of 7 million,” Hastings wrote, with 6.2 million of those accounts coming from international markets. “Our internal forecast still currently calls for annual global paid net adds to be up year over year.”
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