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Netflix has been the premier streaming service, but it’s taken a few hits this year. Its revenue report on Tuesday stated that it lost nearly a million subscribers in the second quarter. This is the largest subscriber churn in the company’s history, but it’s below the 2 million that was initially predicted in April’s awful Q1 report.
“First and foremost, we need to continue to improve all aspects of Netflix,” the company wrote in a shareholder letter. It laid out its priorities going forward, first and foremost being delivering streaming content to its subscribers without worrying about other potential sources of revenue.
Over the past three months, Netflix has coordinated its business to better address the challenges it expects to face for the rest of the year. It laid off 150 employees back in May, and in April, it announced the introduction of a new, cheaper subscription tier featuring ads. In addition, it announced a plan that you had to “add homes” on your subscription to cut down on password sharing.
Netflix had a strong spring and summer as Season 4 of Stranger Things generated 1.3 billion hours of viewing. The show also sparked a sensation in pop culture by featuring Kate Bush’s “Running Up That Hill” and Metallica’s “Master of Puppets” getting discovered by a whole new generation with both songs finding new life.
The company also mentioned that they wanted to keep their approach to how you stream their programming as simple as possible, but understand that with ads and sharing are going to make things mildly more complex.
“These initiatives are similar to expanding into originals, launching our service across the world, and building our own studio, each of which also increased complexity but are natural extensions intended to enhance our existing business,” the letter stated.
“We’re confident and optimistic about the future,” the letter concluded.
Subscribers still have a lot to look forward to for the latter half of the year including Cobra Kai Season 5, and Mike Flanagan’s The Midnight Club.
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