Streaming giant Netflix has had quite a rough ride for the better part of the year. After announcing the loss of 200,000 subscribers in the first quarter of the year, it predicted that it would lose two million of them in the second quarter.
Although the company didn’t hit the earlier predicted loss, it still reported shedding 970,000 subscribers between April and July. This is the company’s largest loss of subscribers in the company’s history.
There is evidently a new shift in the way people view Netflix and it has had to adjust in order to cope with a change in consumption habits. To this end, the company has announced a raft of measures that include laying off more than 400 employees. It has also said that it will be introducing an ad-supported subscription which will come with a cheaper package. This move was stamped by a partnership with Microsoft, which will provide the necessary infrastructure to support ads.
The company’s Q2 report sounded more optimistic, with the company seemingly picking lessons from its losses in the first quarter of the year. In spite of the loss in subscriptions, the company reported a $1.4 billion profit, up from $1.3 billion in the first quarter of the year. Revenue jumped roughly 8.6% year over year, to $7.9 billion.
“Our challenge and opportunity are 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 monetize our big audience. ”
With competition emerging from aggressive new players, Netflix has to continuously rethink its business model if it has to retain the market lead.