Netflix lost 970,000 subscribers in the second quarter, outperforming expectations of a loss of 2 million, the company announced Tuesday.
During the first quarter, as Netflix lost 200,000 subscribers and prompted Wall Street and Hollywood to reevaluate the streaming business economy, the company warned it expected it to lose another 2 million subscribers in the second quarter. While the quarter still ended with a net loss in subscribers, the streaming giant expects to add 1 million subscribers in the third quarter.
Netflix now has a total of 220.67 million subscribers, down from the 221.64 million reported at the end of the first quarter. Revenue reached $7.97 billion for the second quarter, representing about 8 percent year-over-year growth.
Netflix’s subscriber losses are a big wake-up call for the company, which has long been known for its large budgets and generous spending. In the wake of its first quarter earnings report, Netflix went into overhaul mode: the streamer went through several layoffs, the most recent of which resulted in the loss of 300 staffers – 216 of them in the US; re-evaluated its film strategy to focus on fewer but better projects, and move away from the low-budget fare; and accelerated the adoption of an ad-supported subscription tier by partnering with Microsoft, which will handle sales and technology for the streaming company.
Netflix has also taken steps to monetize password sharing by allowing primary account holders to add users outside their household for a fee. In August, the company will additional rate structure in Argentina, the Dominican Republic, El Salvador, Guatemala and Honduras that will add an additional “home” outside the primary account for $2.99 per month.
More to come.