Netflix Loses More US Customers Than it Gains, Stock Drops

Death, taxes, and Netflix continuing to grow subscriber numbers.

But here we are in quarterly reporting season, and Netflix just dropped a bomb on investors announcing that the service lost more US subscribers than it gained. The service reported losses of 100,000 US-based subscribers, when it was expected to gain over 300,000 domestic subscribers.

The good news for Netflix is that the service continues to explain internationally, with overall subscriber growth still up. However, that wasn’t enough to keep Wall Street happy, and Netflix stock dropped +10% in after hours trading.

While we’re not trying to argue Netflix should throw up a white flag and surrender, this might mark a shift in the streaming economy. Netflix has essentially one metric that matters to them, total number of subscribers, and for that number to go down, even if just in the United States, might be signaling headwinds.

This is even before Disney launches their streaming service later in 2019. Disney has its sights clearly set on Netflix, with a lower price point and intentions to launch with a massive library including but not limited to Marvel, Pixar and other titles. 

We’re not convinced that Netflix is in danger of massive losses anytime soon, but they might need to rethink their approach domestically as competition gets tighter than ever.