Netflix CEO Reed Hastings May Have Missed the Real Reason Why U.S. Subscriber Numbers Plunged
New research on how consumers react when they don’t know what to watch on their video-streaming service could help explain why Netflix is losing subscribers.
Netflix’s NFLX, -3.11% second-quarter earnings report Wednesday revealed fewer new subscribers than expected. But Nielsen’s analysis on viewing habits might help explain what consumers have been doing if they haven’t been buying Netflix subscriptions of late.
The company said it added 2.7 million subscribers across the globe in the second quarter. The company had predicted it would add nearly twice that (5 million subscribers) and analysts were disappointed. The company also lost 126,000 subscribers in the U.S. in the second quarter, the first such loss since 2011.
That sent Netflix’s stock tumbling. Netflix shares dropped more than 10% Thursday. (Netflix did not respond to a request for comment on this story.)
“We think Q2’s content slate drove less growth in paid net adds than we anticipated,” Netflix executives said in a letter to shareholders this week. Netflix CEO Reed Hastings said that would be a focus in the third quarter, and said the third series of “Stranger Things” had already broken records.
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