While Netflix said it has already endured the worst of the subscriber losses,it isn’t projecting a return to rapid growth any time soon. The company expects to sign up 1 million subscribers in the current three-month period – essentially reversing the losses of the first half. That’s well short of the 1.83 million analysts forecast this period.
The sudden reversal in subscribers – ending a decade of uninterrupted growth – has spooked Wall Street and Hollywood,both of which saw streaming as the future of entertainment. Shares of Netflix were down 68 per cent this year through Monday’s close.
But Netflix remains confident in its position. The company said its share of total TV viewing in the US hit an all-time high in June at 7.7 per cent.
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Management has responded to the slide by cutting costs and adjusting its strategy on several fronts. The company plans to introduce a lower-priced version of the service with advertising later this year,and is testing ways to charge customers for password sharing.
“Our challenge and opportunity is to accelerate our revenue and membership growth by continuing to improve our product,content,and marketing as we’ve done for the last 25 years,and to better monetise our big audience,” the company said in a letter to shareholders.
For the second quarter,revenue grew 8.6 per cent to $US7.97 billion ($11.6 billion),Netflix said. That missed Wall Street estimates of $US8.04 billion,in part because of the strong dollar.