The MoviePass for living rooms... Netflix announced it only added 2.7M new subscribers last quarter, way below the 5M it expected — That's its biggest miss ever, by far. But this stat was the most shocking: In the US, Netflix actually lost 300K subscribers (it was hoping to gain 200K). America is post-peak Netflix.
2 key problems drove the disappointment... And neither was Friends or The Office, the two most popular Netflix shows that'll get pulled in 2020 and 2021, respectively.
- The price increase: Last quarter, the price of a standard account rose from $11 to $13.
- The un-inspiring content: Netflix execs said the "content slate" didn't drive as many users to sign up. Meanwhile, Big Little Lies, GoT, and Chernobyl won eyeballs at HBO. But don't worry — CEO Reed Hastings predicts that Stranger Things 3, The Crown, and Orange Is the New Black's final season will drive 7M new subscribers in the 3rd quarter.
It's harder to win new customers than keep existing ones... Netflix will have to spend $22B annually by 2024 on original, new content, according to JP Morgan, to keep winning new users. It spent big last quarter, but money doesn't always buy great content.
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