It was almost as if the end to the fourth season of Strangers Things was the same as the second quarter earnings announcement. Guess what? The things are not as bad as they were predicted.
They are still terrible. The loss of 970,000 subscribers was reported but the company had predicted it would lose up to 2 million. The company thought it would go from 221.64 million subscribers to 219.64 million, but it only went to 220.67 million.
The last quarter was summarized in the letter as a big challenge. We have been through tough times before. This will be a great test for us and our high performance culture because we have built this company to be flexible and adapt. They are optimistic about the future, according to the letter. The growth of 1 million subscribers is part of that optimism.
In the first few months of the year, the company lost subscribers for the first time in its history, at a time when previous estimates had it gaining two million.
The New York Times predicted the future of the company in the earnings call. Analysts had predicted that the loss of subscribers would be in line with what the company had previously predicted. According to the Times, analysts think that subscribers will leave after they catch up on all the events in Hawkins.
According to a recent report, the most likely reason for a person to leave a service is the first month. The platform's subscriber base is less likely to quit overall, but that number has been getting worse.
The company has aimed its issues at several points, including rising competition among streaming platforms and the war in Ukraine that cost the company hundreds of thousands of accounts. The 100 million accounts that share passwords with friends and family was a sticking point for the streamer.
Even though the company had seen massive growth over the years, analysts and critics said the issue was more with the company's debt to fund its original content.
Since April, its stock price has remained far below 2021 pandemic highs, though the company received a small boost through Tuesday due to anticipated Q2 earnings. 300 employees were cut in April and another 150 in May. Over the past quarter, the company paid out $70 million in total compensation.
The plans to get back on track have been two different things. Even though Reed Hastings has railed against ad-based subscriber tiers in the past, the new one has been created. The company recently entered into a partnership with Microsoft. The new ad tier is expected to be released early in the future.
Password sharing has proved to be a much harder and more controversial endeavor than the other side of the plan. Several Latin American countries were going to be the first to restrict sharing. Users in those countries are being asked to pay an extra fee to add an extra TV outside of their home. The company didn't respond to questions about whether the system would be available in the U.S. or Europe in the near future.
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