Nothing to see here? Netflix stunned by first fall in subscribers since 2011

Taylor Gadsden
TG
Taylor Gadsden
Jul 18, 2019
  • Netflix lost 130,000 subscribers in the U.S. in just three months
  • Experts say the drop is due to seasonality
  • Comes as Netflix is facing fresh competition as Apple, Disney and others prepare to launch rivals 

Streaming titan Netflix lost 130,000 U.S. subscribers in the last quarter – despite predicting a rise of 300,000.

International growth was able to cushion some of the loss, although Netflix also overestimated those numbers in reports to investors.

Netflix projected an overall increase of five million subscribers in the second quarter and only reported a total of 2.7 million. Some experts attribute the subscriber loss to the time of year.

Paolo Pescatore, a tech, media and telco analyst, told Allconnect®, “This is typically one of the company’s challenging quarters due to seasonality.”

However, the industry giant hasn’t seen a subscriber loss of this magnitude since their last price increase in 2011 (a $6 price hike of DVD-by-mail and streaming video bundles) and the announcement of Qwickster, a failed attempt to distinguish DVD rentals as a separate brand.

#DearNetflix was the trending hashtag back in 2011 as consumers flocked to Twitter to express their disapproval and announce their departure from the service. Now, eight years later, subscribers are returning to social media to air their grievances.

So, what now?

Pescatore believes new additions like Disney+ and NBC Universal to the streaming service industry shouldn’t be much of a problem for the long-time favorite.

“The competitive landscape will intensify but Netflix has a huge head start on new rivals. And it still has time to strengthen its position,” said Pescatore.

Netflix kicked off the second quarter with big wins in original programming like Dead to Me, When They See Us and Our Planet. All three nabbed several 2019 Emmy nominations. The service is also doubling down on original films after the dominating performance of titles like Murder Mystery, The Perfect Date and Always Be My Maybe.

“As Netflix has shifted to original content, our marketing has evolved to increasingly focus on launching our key titles to build excitement amongst existing and non-members. We’re continuing to invest in owned and earned media, where we can have strong, direct relationships with fans,” the company stated in their Q2 shareholder’s letter.

Netflix also tagged the impending loss of cult favorites like The Office and Friends as a minor setback and a budgetary opportunity for new original shows.

As of now, the service does not expect a massive subscriber exodus, but as new services start to reclaim more of their content, it’s unsure whether this trend will continue.

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