According to Netflix’s second-quarter financial report, it lost 970,000 customers. The company has lost the most subscribers in its 25-year existence, and while that amount is significant, it is also less than half the 2-million subscriber loss the company had forecast in April, which stunned Wall Street and the streaming sector.
In fact, a large portion of Netflix’s Q2 report appeared to be an effort to reassure investors and the media industry that the company has learned from the news from April, when the company announced a 200,000 subscriber loss. This news caused their stock to plunge 37 percent in a day, resulting in multiple rounds of layoffs and budget cuts. The research even predicts a 1 million subscriber increase in the third quarter, which is the bit of positive news they’re clinging to.
Breitbart news’ Andy Ng reports there are still big challenges ahead:
While Netflix shareholders breathed a temporary sigh of relief on Tuesday, the company still faces tremendous challenges ahead in retaining subscribers — its sole revenue stream, for now. Competing streaming services including HBO Max, Disney+, and Amazon Prime Video are aggressively looking to siphon away consumers at a time when households are cutting back on expenses in the face of skyrocketing inflation and a likely recession.
Things are so dire for Netflix that the company is working on an ad-supported version of its service that is expected to be cheaper than any of its current subscription offerings — a move that Netflix executives had resisted for years.
Last month, Netflix let go of 300 employees in an effort to cut spending, which came after a previous layoff of another 150 staffers. At the same time they’ve been cutting back new programming and cutting the budgets on other shows. But none of these moves have seemed to help.
The company recently dropped an estimated $200 million on the tepidly received action movie The Gray Man, starring Ryan Gosling, and spent a reported $30 million per episode on the fourth season of Stranger Things.
In recent months, employee morale has plummeted, especially among those whose compensation is largely based on stock options.
Netflix’s financial outlook is so grim that billionaire hedge fund investor Bill Ackman recently dumped his fund’s 3.1 million Netflix shares at a loss estimated at more than $400 million.
With its aggressively woke content, including programming from Barack and Michelle Obama, Netflix has alienated large swaths of its subscriber base who have grown increasingly fed up with the streamer’s progressive moralizing.
Something, something woke, something, something broke.