Netflix reports first net subscriber loss in the US, misses global subscriber growth predictions
Netflix’s continued subscription price hikes might finally have reached the end of some customers’ patience in the U.S., judging from an overall paid subscriber decline the company reported in its quarterly earnings for its fiscal second quarter 2019 results. The company’s overall growth for paid subscribers climbed by 2.7 million worldwide, but it actually added 2.83 million new subscribers around the world — while losing around 130,000 net in the U.S. to account for the difference.
Netflix’s price for consumers went up from $10.99 to $12.99 during its fiscal Q2 reporting period, which definitely could account for some of the fall-off. The company doesn’t seem to have anticipated such a strong reaction, however, as it had anticipated a net 5.0 million subscriber growth number as of last quarter, based at least in part on the 5.5 million it added in paying customers during Q2 2018. Netflix did report a net subscriber loss once previously as a publicly-traded company, but that was in 2011 when it split its DVD-by-mail and streaming offerings into two separate companies, which is what accounted for the net decline.
The company specifically says that it missed its subscriber growth adds more significantly in regions where it introduced a price hike, versus those where it did not — though its growth was lower than expected in all regions where it operates. You might think that some of its shedding of users in the U.S. has to do with competition, but the company points out that most of its material competitors are actually just announced, not available in market, so it thinks this isn’t really a significant cause.