Netflix has been a staple streaming service for TV and movie fans across the globe for many years now, but the number of US subscribers has gone down for the first time in almost a decade, shocking investors and causing concern now that several rivals are about to enter the streaming wars.
According to the streaming giant, there were 130,000 fewer US based subscribers at the end of the second quarter compared with the end of the first. This news caused Netflix shares to go down by over 11%, but the stock is still up overall this year.
Their global forecast was not met, with only 2.7 million subscribers being added in the quarter compared with the 5.5 million it was expecting. Compared with the 5.5 million new subscribers who signed up in the second quarter of 2018, that’s a significant drop.
Not only are investors worried about this development, rival streaming services from Disney and Apple are about to enter the marketplace. Netflix is already feeling the hit, with plans for two of its most watched shows – The Office and Friends – to be removed from its service. These shows will be relocated to NBC Universal and HBO Max respectively.
In an interview with Variety, Netflix CEO Reed Hastings has described the introduction of new streaming services as ‘a whole new world’ and admitted it would be ‘tough competition’.
The drop in subscribers is the biggest negative change Netflix has experienced since 2011, when the company made plans to make its mail-order DVD service separate from its streaming business. Due to the raise in prices for its customers, over 800,000 people in the US cancelled their subscriptions.
However, Netflix has described the current situation as a blip as opposed to an ongoing issue. This is because the second quarter is often its weakest time of year. Indeed, the service could see 7 million new subscribers in the current quarter, partly due to the return of popular shows such as Stranger Things and Orange Is The New Black.
