For the first time in history, Netflix has grown slower than anticipated as its earnings report for 2019’s second quarter has shown an increase of only 2.7 Million new subscribers versus the 5.5 million from the previous quarter and initial prediction of 5 million new subscribers, as revealed by Deadline. Even though their subscriber base is still on the rise, it’s something which the company is obviously not happy with as they look to continue their path towards global domination in the entertainment sphere.
Rather than putting the blame on recent price increases in the US or perhaps a sign of potential market saturation, it appears the company is blaming its content slate for it’s lower than expected growth:
we think Q2’s content slate drove less growth in paid net adds than we anticipated.
For a company which focuses on a lot more exclusive content rather than licensed content and far outspends on creating original series and movies than its competitors, it perhaps is the first sign of concern from the company that their expensive strategy could also be a risky one. The company doesn’t provide any clues as to what content they think has been a cause for this, though expect them to cancel series it deems haven’t been successful enough.
Although the company has put the majority of the blame on the content they feel is not strong enough, they have also acknowledged that the price increases have affected some markets:
Our missed forecast was across all regions, but slightly more so in regions with price increases
While I don’t think the company has any reason to panic as they remain by far the most popular subscription service, the figures do perhaps indicate that with increased competition from other companies and people only having so much money to go around that the big growth numbers we have seen from the company may finally be coming to an end.
Netflix continues to put out lots of great content and with the success of shows like Stranger Things season 3 and the likely draw of the upcoming The Witcher series later this year, they still have enough great content to keep subscribers on their service. If the quality of their shows does start to drop though, don’t be surprised if we see people move between subscription services more regularly than we’ve seen in the past as price point and value for money start to factor in more than loyalty.
Last Updated: July 18, 2019
Ithica Jones
July 18, 2019 at 10:55
I’m surprised it’s taken them this long; for every good Netflix show or movie, there’s at least 3 that’s not even worth a gander.
Admiral Chief Umbra
July 18, 2019 at 10:55
*at least 30
Fixed
Ithica Jones
July 18, 2019 at 11:05
Yes, 30. There’s so much trash on these services, and it’s not just Netflix, I mean Amazon Prime is just as bad.
Admiral Chief Umbra
July 18, 2019 at 11:05
I wanted to get A-P for The Expanse, but we are just re-watching Brooklyn 99 currently
Ithica Jones
July 18, 2019 at 11:15
I haven’t seen Brooklyn 99 yet, is it that good? I just finished Chernobyl last night, and holy crap what an amazing show.
Dresden
July 18, 2019 at 11:41
+1 on Brooklyn 99. It’s a must watch in my opinion! The Admiral is going to tell you the same thing.
Yahtzee
July 18, 2019 at 11:41
Nine Nine!
Dresden
July 18, 2019 at 11:41
https://media3.giphy.com/media/l4JySAWfMaY7w88sU/source.gif
Alien Emperor Trevor
July 18, 2019 at 12:02
To nines make a ja?
Admiral Chief Umbra
July 18, 2019 at 12:11
NINE NIIIIINE
Yahtzee
July 18, 2019 at 11:41
Anime Planet is free though, it works through ad powered Crunchyroll 😛
Jacques Van Zyl
July 18, 2019 at 10:55
I signed up a few weeks back – and there’s loads of great shows but I’m already considering not renewing due to just not actually having the time to binge series and stuff. It’s great for the occasional movie, but so is E-TV 😛
Ithica Jones
July 18, 2019 at 11:05
Yeah, I’ve stuck by them for shows like Stranger Things, but in the long run, I don’t really think I’ll keep on subbing.
Gr8_Balls_o_Fire
July 18, 2019 at 11:05
I’ve got a subscription but no internet. How dumb am I?
Jacques Van Zyl
July 18, 2019 at 11:05
I…wait… whu? 😐
Gr8_Balls_o_Fire
July 18, 2019 at 11:15
lol
Had internet but since I moved I never bothered to renew it. Life is much simpler without it.
Netflix is kept coz my family uses it at their homes.
I’m generous like that 😛
Ithica Jones
July 18, 2019 at 11:24
lol, you’re a good man!
Jacques Van Zyl
July 18, 2019 at 11:25
That explains it, and is part of why I have Netflix too – my gran loves her brit soaps.
Ithica Jones
July 18, 2019 at 11:34
I share with my mom too, it’s weird she watches a lot of cooking shows and A LOT OF RU PAUL!
Guz
July 18, 2019 at 11:51
You taught your gran to use netflix…..bravo. I have to install my dad’s apps on his phone for him
Guz
July 18, 2019 at 11:51
Good man
Gr8_Balls_o_Fire
July 18, 2019 at 11:05
Expect to see fixed-term contracts in the near future.
Admiral Chief Umbra
July 18, 2019 at 11:05
I hate to say it, but this is a likely scenario
Ithica Jones
July 18, 2019 at 11:24
Yeah, they’ll probably try to lock people in, but my main concern is the coming mass-extinction of streaming services. How sustainable is this business though? Can it really support 10 – 20 different servces?
Gr8_Balls_o_Fire
July 18, 2019 at 12:11
Well all the competition may drive prices down..? Supplier competition is always good for the consumer.
If they start to collude, then we have a problem, if there is demand, and you can be sure, the people will demand!
Dr Webster Flexington
July 18, 2019 at 12:11
That’s where it gets interesting, because I doubt they’d actually collude – from what I’ve read, the US laws are pretty clear on that, but on the other hand, we don’t want it to collapse to such an extend that there’s a monopoly. And we know who’ll be left standing….
I have a feeling it’s one sociopathic mouse called Mickey….
Guz
July 18, 2019 at 11:51
Do you want to lose customers, cause that’s how you lose customers xD
Gr8_Balls_o_Fire
July 18, 2019 at 11:51
Bet they’ll think that’s how they’ll retain customers lol
Alien Emperor Trevor
July 18, 2019 at 11:34
It never ceases to amuse me how corporations, and the stock market along with them, believe they can just expand endlessly and that there won’t be periods of slow down.
And while I think they could invest smarter in their content, like financing $100m+ movies is a fool’s errand for them as far as I’m concerned and they’d be better off financing more, smaller budgeted movies, I don’t think people actually realise just how much revenue they’re pulling in per year. From the article they have 151 million subs now, just pricing at the basic R100 package locally, which is around $7/m, and with zero growth in subs that means they will pull in $12b in revenue for the year. That’s a conservative estimate, which means they have a shit tonne of continuous revenue to offset financing new content, licensing, and operations.
Yahtzee
July 18, 2019 at 11:34
I love it when you talk financial
Admiral Chief Umbra
July 18, 2019 at 12:11
I’m all hot and bothered now
Dr Webster Flexington
July 18, 2019 at 12:20
He had me with “financing new content”…
Admiral Chief Umbra
July 18, 2019 at 12:20
https://uploads.disquscdn.com/images/1c11b79d05c5d70bc463085e027ea22f19c6fa34d59dc8ed85ecd89946cd2a75.jpg
Yahtzee
July 18, 2019 at 12:20
Ah. So it is Jim on a new account xD
Admiral Chief Umbra
July 18, 2019 at 12:29
X marks the spot
Dr Webster Flexington
July 18, 2019 at 12:29
I miss that guy. I heard he’s still sailing around the globe. Semper Fi Jim! You will be missed.
Admiral Chief Umbra
July 18, 2019 at 12:39
Well I keep close tabs on him, and your hearsay info is outdated.
Gr8_Balls_o_Fire
July 18, 2019 at 12:20
That was my first thought. How the feck do they expect continuous growth? Surely they know of the business cycles, the initial growth spurts, the plateaus, etc..