Netflix is losing customers

Netflix isn’t exactly known for their frugality, but they might want to consider squirreling away some cash going forward. According to a new report, the streaming service is losing customers – which means they’re losing money, too. Netflix blamed the drop on both their current content slate (ouch) and their recent price hike, but they’re also committed to remaining ad free. So that’s good, I guess.

Bloomberg has a piece about Netflix’s latest earnings report, and the news isn’t good. I’ll confess that anytime one of these reports surfaces with numbers and percentages, I tend to get glassy-eyed (I was never very good at math). But it boils down to this: Netflix is hemorrhaging money and customers, and they might want to work on that. Here’s a more technical explanation:

The shares plunged as much as 12% to $320.30 in New York Thursday, tumbling toward the worst one-day drop in three years, after the company reported a loss of 130,000 customers in the U.S. Netflix blamed higher prices and a weak slate of TV shows. It signed up 2.8 million subscribers internationally in the period, roughly half what the company predicted.

This is the worst earnings report for Netflix since 2011, which is when they decided to split their physical disc mail from streaming. However, the folks at Netflix don’t seem too concerned – at least not publicly. “Our position is excellent,” said Chief Executive Officer Reed Hastings. “We’re building amazing capacity for content. Our product has never been in better shape.”

Netflix thinks their second quarter is going to pick up because of more exciting content, namely The Crown and Martin Scorsese’s The Irishman. Still, the streaming giant isn’t out of the woods. For one thing, they’re soon going to have to contend with more competitors. Disney, Warner Bros and Apple are all launching their own services soon – and Netflix is losing titles like The Office and Friends in the process.

With all these money concerns, some have theorized that Netflix might start using ads soon. But that’s not happening. “We, like HBO, are advertising free,” Netflix said. “That remains a deep part of our brand proposition; when you read speculation that we are moving into selling advertising, be confident that this is false. We believe we will have a more valuable business in the long term by staying out of competing for ad revenue and instead entirely focusing on competing for viewer satisfaction.”

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