Netflix is struggling to keep up as its rivals make strides.
The king of streaming lost more than 970,000 subscribers during the second quarter, Tech Crunch reported. This is after the company reported losing 200,000 subscribers and missing revenue projections in the first quarter — leading to 300 employees being laid off in June.
The loss of subscribers is still much lower than the two million Netflix had projected to lose, and the stock market rejoined with shares up 10% in after-hours trading Tuesday, according to Axios.
There are a total of 220.67 million subscribers on the platform, with millions piggybacking for free on paid subscriptions. A huge chunk of the subscriber loss can be attributed to Netflix discontinuing its service in Russia after the country’s invasion of Ukraine.
“At almost every single impasse they have faced before, the company found a way to safely maneuver before hitting the wall,” Michael Nathanson, a senior analyst at MoffettNathanson, wrote in a research letter after the first quarter earnings report, per The New York Times.
“However, this time it feels different, as the first quarter 2022 earnings release, investor letter and video portrayed a company that was more surprised by things and less clear than ever about the path forward.”
In addition to adding a million new subscribers next quarter, the company is trying out different ways to grow.
“We’ll likely start in a handful of markets where advertising spend is significant,” the company said in a letter to shareholders, per Adweek. “Like most of our new initiatives, our intention is to roll it out, listen and learn, and iterate quickly to improve the offering. So, our advertising business in a few years will likely look quite different than what it looks like on day one.”
The streaming service recently announced its partnership with Microsoft to create an ad-supported subscription plan, set to go into motion in early 2023. An upcharge for password sharing is also set to roll out around that time.
The “Stranger Things” streamer also announced that it is acquiring Animal Logic, an Australian animation studio that was behind the films “Happy Feet” and “Peter Rabbit,” in hopes of being less reliant on content licensed by its rivals.
While Netflix continues to plan ahead, other streaming companies like HBO and Disney have been making industry-shaking moves.
The Emmy nominations this season are a great example of the head-to-head competition. Last year, HBO, together with its streaming service HBO Max, garnered 130 nominations, while Netflix was close with 129, per Variety.
This year, HBO received 140 nominations, with two shows — “Succession” and “The White Lotus” — receiving a total of 45 alone. Netflix was far behind with 105, proving that making quality content consistently can be a challenge.
Disney, on the other hand, is doing something unusual. Last week, it announced it was raising the price of ESPN+ from $6.99 per month to $9.99 per month, a 43% increase, as noted by The Verge. Meanwhile, the price of the Disney bundle, which includes Disney Plus, ESPN+ and Hulu, remains the same.
This move may be in hopes of reminding subscribers of the “new and valuable content on the service, including live National Football League games, exclusive Grand Slam tennis matches from Wimbledon and the Australian Open, PGA Tour events, and National Hockey League games,” wrote CNBC’s Alex Sherman.
The price hike will also help Disney boost revenue from the streaming service, which isn’t currently profitable.