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The second quarter of 2019 was surprisingly tough for Netflix, which lost 126,000 domestic subscribers during its latest fiscal period. In its second quarter 2019 earnings call, Netflix also said it failed to meet growth expectations in all other regions worldwide.
Netflix expected to gain 300,000 U.S. subscribers during the fiscal period. Although paid Netflix memberships grew by 2.7 million worldwide in Q2, that growth was far below the company’s forecast of 5 million net adds. Netflix added 5.5 million paid memberships in Q2 last year.
Company - Shareholders - Members - Q3 - Q3
Regardless, the company told shareholders that it expects to add 7 million paid members in Q3, more than the 6.1 million added in Q3 last year.
Netflix attributed the middling Q2 growth to a weak slate of content. Although the company missed its membership forecast across all regions, Netflix noted that the numbers were lowest in areas that saw price increases. Netflix increased its standard subscription price from $10.99 to $12.99 during the fiscal period.
Company - Q2 - Results - Announcements - Netflix
The company’s underwhelming Q2 results came after recent announcements that Netflix will lose the rights to the massively popular sitcoms “Friends” and “The Office” in early 2020. “Friends” will find a new home on the upcoming HBO Max streaming service, while “The Office” will be heading to NBC Universal’s still-unnamed streaming platform. Netflix has also lost much of its Disney content in the last few months, including many of the Marvel Cinematic Universe films, which will be on Disney’s upcoming Disney+ streaming service.
Content exclusivity has become the coin of the realm for streaming services as entertainment companies develop their own streaming platforms. Netflix spun the loss of those sitcoms and its Disney content as a move that would free up its budget for more original content. Regardless, the company highly valued those shows and almost certainly sees their departure as...
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