Netflix reverses two quarters of declining subscribers with new content push

midian182

Posts: 8,484   +104
Staff member
What just happened? Netflix has reversed two consecutive quarters of declining subscriber numbers, adding more than double the number of predicted new subs between July and September. A lot of the credit is being given to a group of 80's kids, a notorious serial killer, and the king of dreams.

After years of sitting comfortably as the most successful streaming service in the world, Netflix's decade of sustained growth came to an end in Q1 when it recorded its first decline in subscribers—around 200,000—following a massive boost in users throughout the Covid-19 lockdowns.

It was the same story in the second quarter when almost a million subs decided to leave, though that figure was better than the two million Netflix predicted would cancel their subscriptions.

But the trend reversed in Q3. Netflix expected its slate of third-quarter shows would help it regain the million users lost during the previous quarter. This is likely one instance where the company will be happy it miscalculated: 2.4 million people joined the service over the last three months.

Much of the credit for the new subs goes to Stranger Things. The hugely anticipated fourth season of the retro horror/sci-fi drama became only the second Netflix show after Squid Game to hit over one billion hours viewed.

Netflix's next massive hit was Sandman. The excellent adaptation of Neil Gaiman's graphic novels managed 198 million viewing hours in its first ten days. More recently, Dahmer – Monster: The Jeffrey Dahmer Story hit 300 million hours in its first full week of availability.

"After a challenging first half, we believe we're on a path to re-accelerate growth. The key is pleasing members," Netflix wrote in a letter to shareholders. "It's why we've always focused on winning the competition for viewing every day. When our series and movies excite our members, they tell their friends, and then more people watch, join and stay with us."

Netflix also took a shot at competitors such as Amazon Prime, Apple, and Disney Plus, noting that all its rivals are losing money while Netflix recorded a $5 billion to $6 billion annual operating profit.

There's good news for current Netflix subs: the streamer hinted that the strong quarter could see it boost spending on new content this year. Co-CEO Ted Sarandos said it would "revisit" the $17 billion figure that was previously announced.

Yesterday brought confirmation that Netflix will further crack down on password sharing with its new profile transfer tool, arriving just weeks before the ad-supported tier launches.

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Uncle Al

Posts: 9,363   +8,581
They just don't get it. Anytime you take away a "perceived" benefit without replacing it with an equally or better benefit, you will drive away subscribers. Had they thought about the ability for multiple people to share passwords and blocked that from the beginning the issue never would have developed. Now they are stuck with it. Once again, bad management that doesn't fully test and test a product before putting it in the field.
 

Revolution 11

Posts: 235   +329
They just don't get it. Anytime you take away a "perceived" benefit without replacing it with an equally or better benefit, you will drive away subscribers. Had they thought about the ability for multiple people to share passwords and blocked that from the beginning the issue never would have developed. Now they are stuck with it. Once again, bad management that doesn't fully test and test a product before putting it in the field.
I would argue that the ability to watch from different households was a value add argument that boosted Netflix's growth and its appeal to customers early on, especially considering that early Netflix offered nothing unique to customers. It was a glorified third-party distributor of old media catalogs and a dumping ground for movies and shows with no unique Netflix content.

The company got its worth from the policy.
 

seeprime

Posts: 699   +923
I would argue that the ability to watch from different households was a value add argument that boosted Netflix's growth and its appeal to customers early on, especially considering that early Netflix offered nothing unique to customers. It was a glorified third-party distributor of old media catalogs and a dumping ground for movies and shows with no unique Netflix content.

The company got its worth from the policy.
Early on, the $7.99 monthly charge was worth it, to me, to watch network shows without the 18 minutes per hour of ads that broadcast TV provided and still does. Even cables on-demand shows we're ad laden. Netflix was worth the price.
 

wiyosaya

Posts: 8,420   +7,858
I would argue that the ability to watch from different households was a value add argument that boosted Netflix's growth and its appeal to customers early on, especially considering that early Netflix offered nothing unique to customers. It was a glorified third-party distributor of old media catalogs and a dumping ground for movies and shows with no unique Netflix content.

The company got its worth from the policy.
:rolleyes: Are you watching the same Netflix everyone is talking about? No new content? Then what was their new content - as discussed in the article? Vaporcontent?
 

wiyosaya

Posts: 8,420   +7,858
They just don't get it. Anytime you take away a "perceived" benefit without replacing it with an equally or better benefit, you will drive away subscribers. Had they thought about the ability for multiple people to share passwords and blocked that from the beginning the issue never would have developed. Now they are stuck with it. Once again, bad management that doesn't fully test and test a product before putting it in the field.
IMO, you hit on a non-issue.

Yes, they still have the policy and they added 2.4 million subscribers. Sounds like a non-issue to me.

And it is a non-issue to me. I have never shared my account with anyone, and I could care less if they allow me to do that or not. As well, someone who is acting as a non-paying shared account holder is unlikely to count as a "real" subscriber.
 

Revolution 11

Posts: 235   +329
:rolleyes: Are you watching the same Netflix everyone is talking about? No new content? Then what was their new content - as discussed in the article? Vaporcontent?
Did you read the same comment that I wrote? 🙄

I was talking about the original Netflix which did not have any original content. The ability to share passwords and watch from different households WAS a selling point in those days and valuable to Netflix. It was worth it to the company in those days.
 

wiyosaya

Posts: 8,420   +7,858
Did you read the same comment that I wrote? 🙄

I was talking about the original Netflix which did not have any original content. The ability to share passwords and watch from different households WAS a selling point in those days and valuable to Netflix. It was worth it to the company in those days.
Ancient history, and appears to have little to do with the numbers of subscribers ATM.
 

AlexIL

Posts: 16   +11
Netflix? They still exist?

I ceased subscription when they started to push agendas of theirs. It would be a bad joke to pay and be feeded with policies I could not care less about instead of enjoying the entertainment.
 

Bamda

Posts: 416   +224
Netflix? They still exist?

I ceased subscription when they started to push agendas of theirs. It would be a bad joke to pay and be feeded with policies I could not care less about instead of enjoying the entertainment.

Yes, they exist, their current subscriber total is over 2/3 of the current population of the USA. And fast approaching 3/4. So yea they exist.